Luanda – Angola’s external debt stock stood at Akz 29,6 billion (Usd 1 is Akz 616.17) in November 2020, recording a 35 percent rise as compared to the figures in the beginning of the year.
The information is contained in a report from the Debt Management Unit released on 30 December last year.
Named “Impact of Covid-19 on government debt”, the report says the variation resulted from the exchange depreciation during the period in question, as once in Usd denomination, the debt stock variation stands at 2% only.
According to the source, the country’s difficult economic and financial context, coupled with the current external debt level, have led to a number of debt management measures, that culminated with the adoption of the G-20 group Debt Service Suspension Initiative (DSSI) and a negotiation with the main Chinese creditors.
In the period in respect, the report says, in terms of attraction of financial resources, the country recorded a drop in disbursements, mainly justified by the emission of Eurobonds (Usd 3,0 billion), as a result of the rise in yields imposed by the investors, in view of the market prospect on the performance of the economy and risk perception.
The restrictions imposed by the pandemic have affected the physical and financial implementation of public investment projects, according to the report.
The support of debt priority agreements with official creditors will allow treasury relief until 2023, and in the short term it is intended to create mechanisms, translated into a reserve cushion to meet future debt service commitments, and reduce risks related to its sustainability.
The possibility of adoption of a Contingency Plan is currently being considered in the event of a worsening of the financial conditions, with a view to settling possible risks of default.
The debt obligation with a cash impact until December 2020 was Akz 2,1 billion, 60% of which related to Treasury Bills.
The rollover of the debt, in the period under analysis, stood at 46%, it is said.
According to the Finance Ministry quoted by the report, the impact on domestic indebtedness resulted from the reduction of oil revenues and, consequently, the increase in financing needs that culminated in the review of the 2020 State Budget.
On the other hand, in view of the need to accommodate a larger volume of issuance, a review of the Annual Debt Plan 2020 has been prepared.
In response to the negative effects of the pandemic, the limit for issuing Non-Re-adjustable Treasury Bonds has been increased to ensure coverage of the extraordinary needs of the National Treasury.
The Ministry of Finance says that the emergence of the pandemic has put further pressure on the domestic debt, which was helped by the introduction, by the National Bank of Angola (BNA), of the custody fee on excess liquidity, the main objective of which is to foster credit to the economy.
