Ver Angola


Angola negotiates financing with three external banks to pay debt

The financial rating agency Standard & Poor's said that Angola is negotiating with three external banks financing worth 1.5 billion dollars to help pay off public debt.


"The government of Angola continues to manage its debt payments and engage with creditors to have additional sources of financing", writes S&P, pointing out that the Executive "is in discussions with three external banks about liquidity mechanisms, totaling around $1.5 billion to help meet payments."

In a set of Questions and Answers about Angola, with the explicit aim of clarifying investors, and to which Lusa had access, S&P echoes the most common questions asked by investors and presents the answers, focusing on the issue of public debt, which rose from 65 percent of GDP in 2022 to 90 percent of GDP last year, mainly due to the 39 percent devaluation of the kwanza.

"We expect the Government to have sufficient resources to pay its debt, according to the payment profile over the next two years", write S&P analysts, but the Ministry led by Vera Daves de Sousa "is managing future payments of debt, which should reduce pressure".

However, they add, "the ability to pay the debt depends on oil prices remaining above 65 dollars and production remaining adequate", which should not be a problem, as S&P's forecast for the price of a barrel points to to $85 this year and $80 by 2027, with production remaining between one million and 1.1 million barrels per day.

This year and next, Angola faces an increase in payments on public debt contracted in recent years, having to pay US$4.5 billion this year and another US$5.1 billion next year in commercial debt.

According to S&P, the main questions that investors ask relate to the predominance of the oil sector in Angola and the implications for public finances, the impact of the exchange rate on the country's financial vulnerability, and the impact of popular protests in the implementation of economic reforms, in addition to the volume of debt and composition of creditors.

The S&P report is released a few days after the President of the Republic, João Lourenço, signed an authorization for a loan of 500 million dollars, from the South African branch of Standard Bank, and after the National Statistics Institute announced that Angola's economic growth was 0.9 percent last year, having recorded a drop of 0.3 percent in the fourth quarter of 2023 compared to the previous one and an expansion of 1.4 percent compared to the last quarter of 2022 .


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