Angola expects oil-backed China loans to drop to $7.5 bln to $8 bln by year-end

Reuters

2 days ago

LUANDA, July 24 (Reuters) - Angola's oil-backed loans owed to China will drop to around $7.5 billion to $8.0 billion by the end of the year, the director of the country's debt management office said, as the government moves to reduce its reliance on resource-backed financing.
"All debt collateralised by oil revenues is concentrated in agreements with China, which have been gradually reduced in recent years," Dorivaldo Teixeira, Director of Debt Management Unit in the finance ministry, told Reuters late on Wednesday.
Angola has been trying to reduce its exposure to resource-backed loans amid a more challenging external environment that has seen volatility in commodity prices, higher interest rates and changing risk perceptions.
Oil-backed loans to China stood at $10.146 billion at the end of last year, official data showed, and had already dropped to $8.943 billion at the end of last month.
Angola stopped contracting asset-backed loans with China in 2017, Teixeira said.
"The government has adopted a more cautious and transparent approach to contracting external financing," he said.
The southern African country has paused plans to sell debt on international capital markets for now, Teixeira added, citing the uncertain external backdrop.
In April, Angola had to pay $200 million to JPMorgan as additional security for its collateralised bond in a margin call after U.S. tariff turmoil pushed oil prices sharply lower and hit bonds issued by so-called frontier markets - smaller and riskier emerging economies.
"The increase in domestic debt in the first half of 2025 reflects a deliberate adjustment strategy in response to an unfavourable external environment," Teixeira said.
Domestic borrowing rose in the first half of this year, data from the debt management unit showed, compared with the same period last year.
"The government has chosen to increase its reliance on the domestic market, which has shown greater resilience and responsiveness," Teixeira said.