Angola looks at refinancing debt as it faces higher repayments on Chinese loans
- As crude prices rise amid Ukraine-Russia war, the oil-rich nation will have to increase its instalments as part of debt relief agreements
- Finance minister says the country will start to reduce its debt to China, including by refinancing through multilateral and commercial alternatives
China Development Bank (CDB) and the Industrial and Commercial Bank of China (ICBC) handed Angola a three-year debt relief package of at least US$4.9 billion from 2020 to 2023, according to data tracked by the China Africa Research Initiative. Luanda also received an undisclosed amount of debt relief from China Eximbank.
Angola uses part of its oil shipments to repay some of its resource-backed loans. But when oil prices decline, the country is forced to pump more oil to service its debts, a move that becomes untenable.
Angolan Finance Minister Vera Daves de Sousa says the country will increase its loan instalments to China to settle a US$20 billion debt. The country’s public debt stands at US$67.5 billion, which Angola calls “sustainable” – though Daves de Sousa admitted there had been some “budgetary indiscipline” in the past.
Angola is China’s largest borrower in Africa – including US$14.5 billion from the CDB and US$5 billion from the Export-Import Bank of China. It has also borrowed from the ICBC, China’s largest lender.