"We believe that the Angolan authorities will continue to serve foreign currency debt in 2020 and 2021, but with the amortization date approaching, the Government will have to guarantee new sources of financing, and this can be difficult due to the level of debt that Angola has and may depend on an economic balance and the return to robust economic growth ", wrote Jermaine Leonard.
In a special report aimed at answering the main doubts of investors on various topics and several countries, Jermaine Leonard addresses the question 'Will Angola try to restructure the Private Debt' and writes that "the central scenario of Fitch is that Angola fulfills the obligations of the external debt in 2020 and 2021 due to a combination of rescheduled payments to China and other bilateral creditors, support from multilateral financial institutions and resources to foreign reserves ".
The good relationship between Angola and the International Monetary Fund (IMF), adds the analyst, "suggests the feasibility of a follow-up program" after the current one, and the country can also regain access to international markets and resort to emissions to fill financing shortfalls.
In response to the central question about the possibility of Angola restructuring private debt, a possibility that Finance Minister Vera Daves has repeatedly dismissed, Jermaine Leonard recalls that "the IMF has pointed out serious challenges to debt sustainability", despite expecting a down from 123 per cent of GDP this year to 70 per cent in 2025.
"Fitch expects Angola's debt to increase to 129 percent of GDP, or 850 percent of tax revenue, and this is indicative of Angola's difficulties in increasing non-oil revenue," warns the analyst, adding that this level of debt-to-revenue ratio is more than double the average of 356 percent of countries rated 'B'.
For this reason, he concludes, "although the authorities have a strong record of implementing structural and budgetary reforms, a failure to sustainably reduce the debt burden can lead to a situation where the IMF makes private debt restructuring a condition for growth. financial support".
