Angola aims for three years of `breathing space' from creditors

Angola hopes that creditors will cut the country some slack in the medium term.
Angola hopes that creditors will cut the country some slack in the medium term.
Image: Getty Images/Dan Kitwood

LONDON - Angola hopes to get "breathing space" on its debt for the next three years after negotiations with its main creditors, its finance minister said on Tuesday.

Africa's second-largest oil exporter, which has been hit by both the coronavirus and an oil price rout, is in talks with bank creditors and China, said Vera Daves de Sousa during a Bloomberg virtual event.

"We hope to have breathing space for the next three years," she said. "Since 2020, almost $6 billion as a result of these negotiations."

Angola owes more than $20 billion to a number of Chinese entities, including $14.5 billion to the China Development Bank and nearly $5 billion to the Export-Import Bank of China. It has also borrowed from China's largest lender, ICBC, according to analyst calculations.

It is also part of the G20 group's Debt Service Suspension Initiative (DSSI), which since April has helped 46 countries defer $5.7 billion in 2020 debt-service payments. G20 leaders on Sunday endorsed a plan to extend the freeze in payments to mid-2021.

Angola's challenges went beyond its debt negotiations, said Daves de Sousa.

"That's why we keep working on our fiscal side and also on the investments that are needed to make sure our GDP growth is good to negotiate with creditors," she said.

Angola would consider tapping the Eurobond market once the market began to trust the government's ability to service its debt again, she said.

"2021 will be an important test as we believe we will start seeing the results of our fiscal reform," Daves de Sousa said.

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