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Country <strong>Debt</strong> <strong>Guide</strong><br />
15<br />
Angola<br />
Figure 1: Composition of Angola's debt stocks<br />
Current Financing Challenges<br />
WHAT DOES ANGOLA STILL NEED TO FINANCE?<br />
SOME EXAMPLES:<br />
ACCESS TO ELECTRICITY FOR 57% OF THE POPULATION<br />
ACCESS TO DRINKING WATER FOR 44% OF THE POPULATION<br />
ACCESS TO INTERNET FOR 73% OF THE POPULATION<br />
IMPROVING PORT INFRASTRUCTURE BY 41% TO REACH CHINESE LEVELS<br />
Angola’s economy – and by extension its fiscal position - is heavily reliant on exports of oil, which account for two<br />
21<br />
thirds of government revenue and 95% of all exports. Furthermore, as illustrated above, it is clear that Angola has<br />
significant financing needs in order to meet key needs for the population, which are unlikely to be met through<br />
domestic financing alone. A recent collapse in the oil price has exacerbated vulnerabilities in the Angolan economy<br />
and damaged external receipts.<br />
Combined with a growing debt to GDP ratio and high borrowing costs – average interest rates in newly issued debt<br />
were 6.7% in 2018 – Angola may not have much room to accommodate any further economic shocks. A further<br />
currency depreciation or prolonged pandemic-induced recession could create significant challenges for Angola to<br />
service debt obligations or raise new finance to meet needs. Furthermore, its credit rating is ranked the third<br />
lowest within the countries this guide has analyses, rated junk status, meaning Angola would not be able to access<br />
the financial markets through issuing its own Eurobonds.
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