Angola, Sub-Saharan Africa’s second-largest crude oil exporter, is undertaking stress tests to evaluate the potential impact of falling oil prices on its government finances. According to Finance Minister Vera Daves de Sousa, the nation’s 2025 budget is based on an oil price of $70 per barrel. However, recent market fluctuations saw Brent oil futures briefly dip below $60, the lowest in four years, before settling at $66.91.
De Sousa explained that a moderate decline in oil prices might only require a freeze in certain areas of government spending. Yet, should prices fall as low as $45 per barrel, a supplementary budget would likely be necessary. In response to the volatility, the government is implementing measures aimed at strengthening tax administration and boosting property tax enforcement to shore up revenue.
The financial pressures Angola faces have been intensified by broader turmoil in global fixed-income markets. Earlier this month, the country had to pay $200 million after JPMorgan issued a margin call on a $1 billion loan tied to Angola’s international bonds. Despite the strain, De Sousa reported that feedback from ratings agencies and investors was positive, particularly noting Angola’s swift mobilization of funds.
In discussions about Angola’s debt obligations, De Sousa revealed that the government still owes around $8 billion to China, primarily backed by oil, but expects to complete repayment by 2028, earlier than the previously projected 2030–2031. Angola continues to secure concessional loans from China’s EXIM Bank, intended for infrastructure projects like expanding rural internet access and improving education.
Given the ongoing challenges, the government is considering a financing program from the International Monetary Fund. Although Angola aspires to return to international capital markets, De Sousa indicated that current market conditions are unfavorable, and no immediate plans for issuance are underway.
Meanwhile, during meetings in Washington, officials from the Trump administration reaffirmed their commitment to funding the Lobito rail corridor project. This initiative is intended to facilitate the transport of critical minerals from the Central African copperbelt to the Atlantic coast.
Source: Reuters
