“We believe that the Angolan authorities will continue to serve foreign currency debt in 2020 and 2021, but with the amortization date approaching, the Government will have to guarantee new sources of financing, and this can be difficult due to the level of debt that Angola has and can depend on an economic balance and the return to robust economic growth ”, wrote Jermaine Leonard.
In a special report aimed at answering the main doubts of investors on various topics and several countries, Jermaine Leonard addresses the question 'Will Angola try to restructure the Private Debt' and writes that “Fitch's central scenario is that Angola fulfills the obligations of the external debt in 2020 and 2021 due to a combination of rescheduling of payments to China and other bilateral creditors, support from multilateral financial institutions and resources to foreign reserves ”.
The good relationship between Angola and the International Monetary Fund (IMF), adds the analyst, "suggests the feasibility of a follow-up program" after the current one, and the country can also regain access to international markets and resort to emissions to fill funding shortfalls.
In response to the central question about the possibility of Angola restructuring the private debt, a possibility that Finance Minister Vera Daves has repeatedly dismissed, Jermaine Leonard recalls that “the IMF pointed out serious challenges to the sustainability of the Angolan debt”, despite hoping a drop from 123% of GDP this year to 70% in 2025.
"Fitch predicts that Angola's debt will increase to 129% of GDP, or 850% of tax revenue, and this is indicative of Angola's difficulties in increasing non-oil revenue", warns the analyst, adding that this level of debt ratio debt to revenue is more than double the average of 356% of countries rated 'B'.
For this reason, he concludes, “although the authorities have a strong record of implementing structural and budgetary reforms, a failure to sustainably reduce the debt burden can lead to a situation where the IMF makes restructuring private debt a condition for growth. financial support".