"The comments from S&P experts about the fact that the government is actively managing debt payments in the coming years shows that they think the country has sufficient resources to pay the high installments and maturities over the next three years, provided there are no shocks adverse conditions", reads a comment on the maintenance of Angola's rating at level B-.
In the comment sent to clients, and to which Lusa had access, the African department of this British consultancy writes that "S&P says it would lower Angola's rating if an external shock, such as a sharp drop in the global oil price or other collapse of the exchange rate, or internal problems limited the government's ability to service its external commercial debt".
It also points out that it could "improve the credit rating if economic reforms support a broad-based economic recovery, along with a better-than-expected reduction in debt service costs and greater foreign currency reserves."
For analysts at Oxford Economics, "there are enough positive developments to suggest that oil production will achieve a slight recovery in 2024, in a context in which the robust growth of the non-oil sector must be maintained", which, they conclude, makes it likely that Angola can service its debt without having to resort to additional external financing.
In the analysis accompanying the announcement of the maintenance of the rating, on February 19, S&P says that "despite vulnerabilities remaining pressing, Government debt will fall from almost 90 percent last year to 76 percent at the end of 2027, due to budgetary consolidation and the fact that rising inflation will result in GDP growth that exceeds the accumulation of debt".
S&P notes that almost half (48 percent) of external debt payments this year and next will be made to China, through payments with oil as collateral, "and therefore a considerable part of the Government's oil revenues will continue to be awarded to payments to Chinese creditors, which further weighs on budgetary flexibility".
Total commercial debt payments will reach 4.4 billion dollars this year (4,000 million euros), of which 800 million dollars (742 million euros) relate to commercial debt securities issued in foreign currency (Eurobonds), but will increase to 5.1 billion dollars (4.7 billion euros) in 2025, of which 1.66 billion dollars, around 1.54 billion euros, relate to Eurobonds.
Bilateral and multilateral debt payments "are more modest, reaching 1.3 and 1.6 billion dollars (1.2 and 1.4 billion euros), respectively, in the same period", they conclude.
