Angola returns to the bonds market

President João Lourenço has said he wants to revive Angola’s fortunes by tackling corruption
A picture taken on February 19, 2015 shows an Angolan money changer holding a bundle of Angolan Local currency banknotes in a street in Luanda, Angola. – Angolan President Joao Lourenco was elected five months ago promising an “economic miracle”. But the path to transforming the oil-dependent country’s system will be long and difficult — a situation highlighted by anger over the de facto de-valuation of the local currency. Since January, new central bank governor Jose de Lima Massano has been presiding over something of a fiscal revolution. He is weaning the local kwanza currency off its artificial dollar-pegged value, and phasing in a floating exchange rate. (Photo by AMPE ROGERIO / AFP)

Following Angola’s deal with the IMF, the country is preparing to return to the bonds market. According to Angola’s Treasury Secretary, Vera Daves ,the IMF deal with Angola hopes to kick-off a three-year privatisation programme this year

Pushed towards an economic crisis by the fall in crude prices since mid-2014, Angola, Africa’s second-largest oil producer, secured $3.7bn of International Monetary Fund aid in December.

Its currency, the kwanza, dropped more than 40 percent last year making it the second worst performing in the world after Argentina’s peso.

The country’s debts also jumped and international reserves fell to a seven-year low of $11.1bn in December.

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Daves said the country had financing needs of around 3.5trn kwanza ($11.32bn) this year compared to the nearly 5trn kwanza it spent in 2018, and was hoping to look to international markets to secure some of the money.

As a preparatory move in 2018, Angola sold a $1.75bn 10-year bond at a yield of 8.25 percent 

Asked how soon it could happen, Angola’s Treasury secretary said it would depend on investor appetite. 

President João Lourenço, who took over in September 2017 after 38 years of rule by José Eduardo dos Santos, says he wants to revive Angola’s fortunes by tackling corruption, opening it up to foreign investment and diversifying away from oil, which accounts for more than 90 percent of exports.

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The IMF programme is aimed at bringing stability to the country and fostering a return of economic growth, especially in the second half of the year, when Daves expects an expansion of around 2.8 percent.


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