External Debt Composition and Analysis
Angola’s external debt stands at $45.57 billion, representing approximately 73.6% of total public debt ($61.93 billion) and roughly 39.6% of GDP ($115.2 billion). The composition of this debt – spanning bilateral, multilateral, and commercial creditors – shapes the country’s refinancing risk, currency exposure, and capacity to access international capital markets.
Creditor Composition
| Creditor Category | Estimated Share | Approximate Amount |
|---|---|---|
| Bilateral (China) | 37-46% | $17-21B |
| Commercial (Eurobonds, syndicated loans) | ~42% | ~$19B |
| Multilateral (IMF, World Bank, AfDB) | ~20% | ~$9B |
| Other bilateral | ~5% | ~$2B |
Eurobond Profile
Angola has accessed the international bond market multiple times, with outstanding Eurobonds forming a significant and closely watched component of external debt. Key features:
- Total outstanding: Approximately $8-10 billion across multiple series
- Maturities: Range from 2028 to 2049, with a concentration in 2028-2032
- Coupon range: 8.0-9.5%, reflecting Angola’s sub-investment grade credit rating
- Currency: USD-denominated, creating FX mismatch with kwanza-based revenues
- Trading: Active secondary market; spreads serve as a real-time sovereign risk barometer
Eurobond spreads over US Treasuries have compressed from crisis-era highs above 1,000 basis points to approximately 500-600 bps, reflecting improved fiscal fundamentals and the declining debt-to-GDP ratio.
Multilateral Lending
Multilateral creditors provide the most favorable terms and carry significant policy influence:
- IMF: Extended Fund Facility (EFF) support has anchored reform credibility. Article IV consultations provide independent fiscal assessment
- World Bank: Project lending focused on social sectors, governance, and economic diversification
- African Development Bank (AfDB): Infrastructure and regional integration financing
- Bilateral development finance: EU institutions, Portuguese development bank, and others provide concessional lines
Multilateral debt carries the lowest interest rates (typically 1-3%) and longest maturities, but comes with policy conditionality that includes fiscal transparency, governance reform, and structural benchmarks.
Currency Risk
A critical vulnerability of Angola’s external debt is the currency mismatch: nearly all $45.57 billion is denominated in foreign currency (primarily USD), while government revenues are generated in kwanzas (with oil revenue being the exception, as it is received in dollars). The managed float regime with USD/AOA at 914.60 means that kwanza depreciation directly increases the local-currency cost of debt service.
This FX exposure was the primary driver of the debt-to-GDP surge from approximately 60% in 2014 to 119.1% in 2020 – the increase was almost entirely due to kwanza depreciation rather than new borrowing.
Maturity Profile and Refinancing Risk
The external debt maturity profile shows a concentration of repayments in the 2028-2029 period, creating a “maturity wall” that the government must manage through a combination of:
- Early refinancing via new Eurobond issuance
- Continued amortization of Chinese bilateral debt
- Domestic bond market deepening on BODIVA to shift some financing onshore
- Maintenance of FX reserves at adequate levels ($15.3B currently)
Credit Ratings
| Agency | Rating | Outlook |
|---|---|---|
| Moody’s | B3 | Stable |
| Fitch | B- | Stable |
| S&P | B- | Stable |
Angola remains deep in sub-investment grade territory, though the stable outlooks reflect improvement from the negative watches of 2020. Upgrades would require sustained fiscal surpluses, further debt reduction, and demonstrated resilience to oil price volatility.
Outlook
The external debt trajectory is positive, with the stock declining as amortization exceeds new borrowing. The key risks remain oil price volatility (affecting both fiscal revenues and FX reserves), the 2028-2029 maturity wall, and the opacity of Chinese debt terms. Successful navigation of these challenges would support eventual credit rating upgrades and lower borrowing costs.