Latest news with #VeraDavesdeSousa
TimesLIVE
08-07-2025
- Business
- TimesLIVE
Angola hikes diesel price again to bolster public finances
Angola hiked the diesel price by one-third from Friday as part of the government's drive to curb costly subsidies and shore up public finances. The African oil-producing country has been gradually removing fuel subsidies since 2023, encouraged by the International Monetary Fund (IMF). Its economy is under pressure because of a slide in the global crude oil price earlier this year, and it faces external debt repayments of about $9bn (R160.04bn) in 2025, including a Eurobond maturing in November. The diesel price has risen to 400 kwanzas (R7.76) per litre from 300 kwanzas before, the second price hike this year. The petroleum products regulator left prices for petrol and liquefied petroleum gas unchanged. Finance minister Vera Daves de Sousa told Reuters in October that fuel subsidies amounted to around 4% of gross domestic product last year and said the government planned to continue removing them in phases. The IMF said in May it had cut Angola's preliminary growth outlook for 2025 to 2.4% from an initial 3%, citing lower oil prices and tightening external financing conditions. A petrol price hike in 2023 triggered deadly protests, but there was no immediate sign of social unrest in Angola on Friday.
Zawya
16-05-2025
- Business
- Zawya
Angola's debt and economic challenges
NAIROBI/LUANDA: The International Monetary Fund has cut its 2025 growth forecast for Angola to 2.4%, mainly due to concerns about the impact of lower crude oil prices on the government's finances and higher interest rates in global markets. Here is an explanation of Angola's debt and economic challenges: WHY ARE INVESTORS CONCERNED ABOUT ANGOLA? Like other small African economies, the Southern African nation's dollar bonds were pummelled during the market turmoil that followed the imposition of U.S. trade tariffs at the start of April. But concerns rose further in April when JPMorgan demanded additional security of $200 million from the government for its $1 billion financing backed by Angola's dollar bonds. The worries were also fuelled by Angola's heavy exposure to the slide in the price of oil that accompanied the market turmoil. Angola is sub-Saharan Africa's second biggest exporter of crude oil which makes up 95% of exports, contributes 60% of the government's revenues and is estimated to drive three quarters of all economic activities, IMF data showed. The government has used a $70 per barrel assumption in its 2025 budget, but prices fell to as low as $60 during the height of the sell-off. Brent crude was trading at $63.93 on Thursday. All this comes as the government faces external debt repayments of $9.1 billion this year, including a Eurobond maturing in November. WHAT HAS THE GOVERNMENT SAID ABOUT THE CHALLENGES? Finance Minister Vera Daves de Sousa has said the slide in the price of oil has increased the likelihood of the government turning to the IMF for a new loan deal. The ministry of finance has also defended its borrowing leading up to this point, saying loans were used to build hospitals and boost the water supply. The government has said it could review its spending plans if the pressure is sustained, and it will weigh its future debt financing carefully to ensure debt sustainability. Total debt stood at close to 70% of GDP last year and it is projected to keep falling as a proportion of economic output, Angola's debt sustainability analysis shows. However, the IMF classifies it as being at a high risk of distress, mainly due to exposure to foreign exchange risks. About 80% of Angola's debt is in foreign currency, including oil-backed loans from China. The government says it has accelerated repayments to China and can weather the storm from the lower oil prices. Angola lacks a deep local debt market it can turn to when the external financing options become tighter. A push to remove fuel subsidies last year to relieve pressure on finances did not attain the desired savings, the IMF said. WHAT IS THE SOCIAL IMPACT, AND THE GOVERNMENT'S OPTIONS? Angola's spending on social services has shrunk by 55% since 2015 due to the growing debt burden, says Debt Justice, a London-based campaign group. The pressure has also curbed its ability to invest in much-needed infrastructure projects, analysts said. Angola is a key part of a new, U.S.-backed transport corridor called Lobito, linking critical minerals-exporting Democratic Republic of the Congo and Zambia to Angola's Atlantic coast. The government has been holding talks with IMF officials this week, including a meeting between IMF Africa head Abebe Aemro Selassie and Angola's President Joao Lourenco in Luanda. Information on whether Angola is seeking a new lending programme have not been provided yet. (Reporting by Duncan Miriri in Nairobi and Miguel Gomes in Luanda; Editing by Karin Strohecker and Toby Chopra)
Reuters
15-05-2025
- Business
- Reuters
What are the debt challenges facing Angola?
NAIROBI/LUANDA, May 15 (Reuters) - The International Monetary Fund has cut its 2025 growth forecast for Angola to 2.4%, mainly due to concerns about the impact of lower crude oil prices on the government's finances and higher interest rates in global markets. Here is an explanation of Angola's debt and economic challenges: Like other small African economies, the Southern African nation's dollar bonds were pummelled during the market turmoil that followed the imposition of U.S. trade tariffs at the start of April. But concerns rose further in April when JPMorgan demanded additional security of $200 million from the government for its $1 billion financing backed by Angola's dollar bonds. The worries were also fuelled by Angola's heavy exposure to the slide in the price of oil that accompanied the market turmoil. Angola is sub-Saharan Africa's second biggest exporter of crude oil which makes up 95% of exports, contributes 60% of the government's revenues and is estimated to drive three quarters of all economic activities, IMF data showed. The government has used a $70 per barrel assumption in its 2025 budget, but prices fell to as low as $60 during the height of the sell-off. Brent crude was trading at $63.93 on Thursday. All this comes as the government faces external debt repayments of $9.1 billion this year, including a Eurobond maturing in November. Finance Minister Vera Daves de Sousa has said the slide in the price of oil has increased the likelihood of the government turning to the IMF for a new loan deal. The ministry of finance has also defended its borrowing leading up to this point, saying loans were used to build hospitals and boost the water supply. The government has said it could review its spending plans if the pressure is sustained, and it will weigh its future debt financing carefully to ensure debt sustainability. Total debt stood at close to 70% of GDP last year and it is projected to keep falling as a proportion of economic output, Angola's debt sustainability analysis shows. However, the IMF classifies it as being at a high risk of distress, mainly due to exposure to foreign exchange risks. About 80% of Angola's debt is in foreign currency, including oil-backed loans from China. The government says it has accelerated repayments to China and can weather the storm from the lower oil prices. Angola lacks a deep local debt market it can turn to when the external financing options become tighter. A push to remove fuel subsidies last year to relieve pressure on finances did not attain the desired savings, the IMF said. Angola's spending on social services has shrunk by 55% since 2015 due to the growing debt burden, says Debt Justice, a London-based campaign group. The pressure has also curbed its ability to invest in much-needed infrastructure projects, analysts said. Angola is a key part of a new, U.S.-backed transport corridor called Lobito, linking critical minerals-exporting Democratic Republic of the Congo and Zambia to Angola's Atlantic coast. The government has been holding talks with IMF officials this week, including a meeting between IMF Africa head Abebe Aemro Selassie and Angola's President Joao Lourenco in Luanda. Information on whether Angola is seeking a new lending programme have not been provided yet.
TimesLIVE
05-05-2025
- Business
- TimesLIVE
International Monetary Fund team to visit Angola this week
A team of officials from the International Monetary Fund (IMF) will visit Angola this week, it said, as the country edges closer to a new loan deal with the lender due to pressure after the slide in crude oil prices. The southern African nation, which is sub-Saharan Africa's second-biggest crude oil exporter, had to pay $200m (R3.67bn) last month after JPMorgan demanded more security for its Total Return Swap, a loan backed by Angola's dollar bonds. The IMF did not immediately provide more details on the mission to Angola and the expected outcomes. Finance minister Vera Daves de Sousa told Reuters the drop in oil prices had made a new loan deal with the IMF more likely, adding the government was studying the potential full impact on its finances.
Reuters
05-05-2025
- Business
- Reuters
International Monetary Fund team to visit Angola this week
NAIROBI, May 5 (Reuters) - A team of officials from the International Monetary Fund will visit Angola this week, the IMF said, as the country edges closer to a new loan deal with the lender due to pressure following the slide in crude oil prices. The southern African nation, which is Sub-Saharan Africa's second-biggest crude oil exporter, had to pay $200 million last month after JPMorgan demanded more security for its Total Return Swap, a loan backed by Angola's dollar bonds. The IMF did not immediately provide more details on the mission to Angola and the expected outcomes. Finance Minister Vera Daves de Sousa told Reuters that the drop in oil prices had made a new loan deal with the IMF more likely, adding that the government was studying the potential full impact on its finances.
