In 2023, Angola faced a daunting economic challenge as its public debt soared to $80.61 billion, claiming 88% of its GDP.
This marked an 11.46% hike from the previous year, largely due to an unfavorable exchange rate.
Following two years of reduction, this rise signals a shift in economic pressures. The National Bank of Angola highlighted these findings in its latest April report.
It revealed that both domestic and international financial commitments had swelled.
Specifically, government debt reached 53.08 trillion kwanzas ($59.53 billion), 84% of the GDP, driven by a 56% spike in both internal and external obligations.
The bulk of the debt, 74.10%, was external, totaling 39.33 trillion kwanzas ($44.10 billion).
This 63% increase stemmed primarily from the kwanza’s depreciation against the dollar.
Such external debts encompass loans from global agencies, foreign governments, and international banks.
Domestically, debt rose to 13.75 trillion kwanzas ($15.41 billion), a 37.5% increase.
This was due to new issuances overlapping with old redemptions and gains in foreign currency valued securities. Local debt forms include treasury bonds and mutual contracts.
Public enterprises, particularly the state oil company Sonangol, saw their liabilities climb to 2.55 trillion kwanzas ($2.8 billion), up from 2.30 trillion kwanzas ($2.6 billion).
This jump largely reflected the kwanza’s sharp 39.23% fall against the dollar. Looking ahead, Angola’s 2024 budget aims to trim the public debt ratio to 69.2% of GDP.
Despite the oil sector contracting by 2.4% and overall GDP growth cooling to 0.9%, sectors such as diamond mining and agriculture showed resilience, growing over 2.5%.
Background
The World Bank projects Angola’s economy to grow by 2.8% this year, a significant increase from last year’s 0.8%.
This growth is driven by the non-oil sector, which is balancing a 2.5% decline in oil production due to investment shortages and aging oil fields.
“Africa’s Pulse” report highlights Angola’s rapid recovery as among Sub-Saharan Africa’s fastest, aiming to reduce poverty and enhance growth.
This follows Niger, Senegal, and São Tomé and Príncipe.
“Africa’s Pulse” report notes weakening Sub-Saharan African currencies, with Angola‘s Kwanza depreciating notably by 60%.
More: Angola news in English, every day from The Rio Times.
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