On Monday, January 27, in Luanda, Minister of Finance Vera Daves de Sousa reaffirmed the Angolan government’s dedication to managing public debt with transparency, accountability, and sustainability. This assertion was made during the presentation session of the Annual Debt Plan for 2025 (PAE 2025), aimed at enlightening key stakeholders—including banks, brokers, public companies, and members of the press—about the strategies underpinning the financing of the General State Budget (OGE).
Key Insights on Debt Management
During her address, Minister Daves de Sousa outlined that Angola has encountered substantial debt service obligations over the past three years, averaging USD 16 billion annually. She noted that China remains the country’s most significant creditor, contributing to a balanced debt trajectory.
“In the international market, we moved to advance the maturity of our Eurobonds due in 2025. Out of the originally issued USD 1.5 billion, we now have USD 864 million scheduled for repayment this November,” the minister highlighted.
Domestic Debt Developments
Shifting focus to domestic debt, the minister reported a significant evolution in the debt profile, observing that the service has become increasingly decentralized. The domestic debt service is currently estimated at Kz 13,263.31 billion (approximately USD 13.53 billion), with projected revenues of around Kz 14,638.07 billion (USD 14.93 billion).
“This data leads us to forecast a debt stock of Kz 57,473.96 billion (USD 58.61 billion) at year’s end, amounting to roughly 63% of our GDP,” she added.
The Annual Debt Plan: A Strategic Framework
The 2025 Annual Debt Plan serves as a key document summarizing the government’s debt management strategy while executing the General State Budget. It considers both internal and external financing sources, ensuring that the debt levels remain within sustainable limits.
To fund the state’s financial needs in 2025, the current plan anticipates raising Kz 14,638.07 billion (USD 14.93 billion), with a notable emphasis on the domestic market, which is allocated Kz 7,548.05 billion (USD 7.70 billion), compared to Kz 7,090.02 billion (USD 7.23 billion) from foreign sources.
Debt Service Projections and Risks
Projected government debt service for 2025 is around Kz 13,263.31 billion (USD 13.53 billion), with external obligations making up approximately 69% (Kz 9,171.39 billion) and internal obligations 31% (Kz 4,091.92 billion). The anticipated public debt stock for 2025 is expected to mirror the figures mentioned earlier, staying at circa Kz 57,473.96 billion (USD 58.61 billion) with a debt-to-GDP ratio of around 63%.
It’s also noteworthy that the 2025 Annual Debt Plan projects a positive net debt of approximately Kz 2,314.03 billion (USD 2.36 billion), indicating an increase in both domestic and external debt stocks. Approximately 83% of the total government debt is sensitive to exchange rate fluctuations.
In terms of risk management, it has been reported that as of December 2024, nearly all (99%) of domestic debt was tied to fixed interest rates, while external debt largely consists of agreements with variable rates—62% indexed to LIBOR and EURIBOR rates. Moreover, the average residual maturity of domestic debt is about three years, whereas external debt carries an average maturity of approximately nine years, reflecting differing refinancing risks across debt categories.
Conclusion
Angola’s commitment to transparent and responsible debt management, as articulated by Minister Vera Daves de Sousa, not only underscores the importance of sustainable fiscal policies but also sets a framework for stakeholders to engage with the country’s economic processes. As the government navigates complex financial landscapes, these insights provide a clearer picture of how public debt will be managed in the coming year.
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