Angola aims to re-enter international bond markets in ’24
Angola is planning to re-enter the international bond markets this year with a $1 billion bond, Finance Minister Vera Daves de Sousa told Reuters.
Daves de Sousa anticipates that the government could reduce its debt-to-GDP ratio to 60 per cent or even lower by 2027.
During discussions at the International Monetary Fund (IMF) and World Bank spring meetings in Washington, Daves de Sousa mentioned that a potential increase in oil prices might lead to lower borrowing costs for Angola, the second-largest crude oil exporter in Africa. “We hope that will help us get access to the market at a better cost,” she stated, revealing the government’s exploration of issuing an ESG bond.
Recent escalations in the Middle East have pushed oil prices above $90 per barrel in early April.
After nearly two years of absence due to the repercussions of COVID-19, Russia’s conflict in Ukraine, and escalating global interest rates, Sub-Saharan African issuers have begun returning to the markets this year.
Daves de Sousa expressed confidence in Angola’s ability to reduce its debt-to-GDP ratio, which currently stands at 74-75 per cent, to 60 per cent or lower through the government’s ambitious reforms. “Our national development plan aims to diversify until 2027 – hopefully, near that time or even before, we will achieve that milestone and uphold it,” she remarked.
A series of privatisations form a crucial component of this plan. The government plans to proceed with the public listing of the Angolan Debt and Securities Exchange (BODIVA) and a stake in insurer ENSA this year.
Additionally, Unitel, the nation’s largest telecommunications company, is slated for debut in late 2024 or early 2025. State-owned oil producer Sonangol is on track for a dual-listing next year or in 2027, she added.
Daves de Sousa projected a 2.8 per cent economic growth for Angola this year, with a similar rate anticipated for the following year. However, inflation remains a concern, and the government may consider extending the current deadline to phase out fuel subsidies by the end of 2025.
“Depending on the social and economic conditions, we will take more time to finalise (the removal), but we still want to do it gradually,” she affirmed.
In March, the IMF advised Angola to continue removing fuel subsidies. Central Bank Governor Manuel Tiago Dias, speaking to Reuters, warned that inflation, projected to reach 19 per cent by year-end, could rise further if fuel subsidies were eliminated.
Output in Africa’s second-largest crude oil exporter has steadily declined since peaking at 2 million barrels per day (bpd) in 2008. Angola aims to boost natural gas production to counteract part of the oil decline.
