Davos, Switzerland, Jan. 22, 2025 (Lusa) - The Angolan government wants to issue up to US$2 billion in debt this year, and should not need a financial programme from the International Monetary Fund (IMF), said the minister of state for economic coordination.
"This year we're going to go to the markets to issue Eurobonds (debt securities in foreign currency)," revealed José de Lima Massano in an interview with the Bloomberg financial information agency in Davos, where the World Economic Forum is taking place, saying that “it won't be any different” from what he has done before.
"US$1 billion (€960 million)," he said, but added that "it could be as much as US$2 billion" (around €1.92 billion).
The second largest oil producer in sub-Saharan Africa will present the proposal to investors this quarter, added the former central bank governor, emphasising that the debt issue will depend on market conditions.
The prices and maturities of the issues are "critical, so that there is no additional pressure on public debt," said Massano, adding, "I just hope that inflation continues on its downward trajectory so that we can have more access to funds."
In November alone, Angola will have to pay US$864 million (almost €830 million) to service its debt, an example of the debt burden it will have to face this year and next.
Angola is one of the African countries that spends more money paying interest on its debt than investing in education and health, says the United Nations Department of Economic and Social Affairs (UNDESA).
"In several of Africa's largest and most populous economies, including Angola, Egypt, Ghana, Nigeria and Uganda, debt interest payments have exceeded total spending on education and health in recent years, showing the difficult policy choices facing governments," reads the report on the Economic Situation and Prospects to 2025, released by the United Nations earlier this month.
Some of these countries, including Angola, have to spend more than 25% of their income to service the interest on their debt, reads the report, released at the same time as an analysis by the non-governmental organisation Debt Justice points to Angola as the country in the world where the highest percentage of income (66%) is used to pay off debt.
Angola will have to pay US$6.2 billion ( €5.9 billion) in 2025, representing 5.2% of GDP, and US$5.4 billion (€5.1 billion) in 2026, representing 4.2% of GDP, which compares with the US$5.4 billion paid in 2024, says Fitch Ratings in a recent analysis of the Angolan economy, presenting these figures as the total debt that will be paid in these years, which includes interest and payments on the maturity of the loans.
In December, Angola signed agreements with investment bank JPMorgan Chase worth US$1 billion, which will be used to finance this year's budget, including infrastructure projects to increase the supply of water, electricity and hospitals, said Lima Massano.
In the interview with Bloomberg, he acknowledged that the country is facing difficulties in terms of debt payments, but pointed out that the debt to GDP ratio has fallen to between 60% and 65%.
"We are trying our best to extend maturities," said the minister, adding that although the country is following the International Monetary Fund's guidelines on resource management, it will not need another financing programme.
The minister recalled that Angola's economy had grown "slightly above 4%" last year, the same as the figure forecast for this year, based on sectors other than oil and the privatisation programme.
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