Angola is seeking to issue up to US$4 billion in debt in order to finance the 2025 General State Budget, reports the online news platform Ver Angola.
Presidential orders reviewed by Portuguese news agency Lusa authorise the issuance of sovereign debt instruments on the Japanese market for a maximum value of US$1 billion, as well as a maximum of US$3 billion in Eurobonds, a form of sovereign debt securities issued in foreign currency, usually US dollars.
Both are part of the public debt strategy to balance the budget and try to extend the maturities of current debt, which in turn reduces the costs of servicing the debt. José de Lima Massano, minister of State and Economic Coordination, told Bloomberg in late January that the pricing and maturities of the issuances are “critical, so that there is no additional pressure on public debt.”
Angolan Finance Minister Vera Daves de Sousa is currently leading a delegation on a four-day non-deal roadshow of the US, visiting Boston and New York to present the “evolution of the country’s macroeconomic indicators in recent years, keeping investors informed” as well as allowing them to have “updated information for decision-making associated with investing in credit risk” in Angola.
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Daves de Sousa’s trip to the US is part of an initiative coordinated by the Debt Management Unit, part of the Ministry of Finance, that began with the presentation of the Annual Debt Plan, followed by a tour of three Middle Eastern countries – Qatar, Oman and the United Arab Emirates – to court investment with the same presentation about Angola’s microeconomic projections.
When Massano initially shared the plan with Bloomberg last month, speaking on the sidelines of the World Economic Forum (WEF), he said the country would seek up to US$2 billion in Eurobonds, significantly less than discussed in recent reporting.
While Angola has slashed its debt-to-GDP ratio in recent years, the country is still among those spending more than a quarter of their revenue to service debt interest, according to the World Economic Situation and Prospects for 2025 report issued by the United Nations in early January. The report noted that fiscal challenges “are most acute in Africa, where the rapidly growing debt-servicing burden is increasingly crowding out resources for essential public services and investment.” Education and health, for example, receive less funding than is paid on debt servicing in Angola.
Massano acknowledged to Bloomberg that Angola is facing difficulties in terms of debt payments, but emphasised the reduction in debt-to-GDP ratio, economic growth of over 4 percent last year (a performance it expects to repeat in 2025) and that, although the country is following International Monetary Fund (IMF) guidelines regarding resource management, it will not need another financing programme.
