Angola to stop borrowing amid rising oil prices

By Hauwa Ali
 
African oil producing country, Angola, has decided to stop borrowing and finance its budget from its revenues from the increased oil prices.
 
The country’s resolve is leveraged on oil prices which has doubled with the war in Ukraine.
 
Angola had raised $1.7 billion in April 2022.
 
In a recent interview with state-owned Radio Nacional de Angola, Finance minister, Vera Daves de Sousa, said, the country will start to reduce its debt to China, including by refinancing through multilateral and commercial alternatives.
 
“Then the value of these debt will progressively start to reduce, and the weights will change as a result of this amortisation,” she said, adding that the country would “seek the least expensive financial solutions possible” and would “ensure the resources serve projects that will add value to the economy.
 
“The main issue is basically to refinance, using different alternatives, such as multilateral financing, the World Bank, the African Development Bank, the French Development Agency, financing from financial institutions, commercial financing, that have the best possible conditions.” She said.
 
Angola is China’s largest borrower in Africa – including US$14.5 billion from the CDB and US$5 billion from the Export-Import Bank of China. It has also borrowed from the ICBC, China’s largest lender.
 
But as international crude oil prices keep rising amid the Ukraine-Russia war, Angola – sub-Saharan Africa’s second-largest oil producer – will face higher repayments on its Chinese loans as part of the debt relief agreements.
 
Angolan Finance Minister also said the country will increase its loan instalments to China to settle a US$20 billion debt, aside  repayment  in the form of oil shipments.
 
The country’s public debt stands at US$67.5 billion, which Angola calls “sustainable” – though Daves de Sousa admitted there had been some “budgetary indiscipline” in the past.