Africa-Press – Angola. China remains one of the country’s largest creditors, with 13.417 million of the total outstanding USD 47.402 billion owed to the Asian country. In total, each Angolan now only owes the Asian giant USD 371, compared to approximately USD 818 in 2017.
Angola’s external public debt stock fell 1% to USD 47.402 billion in the first half of this year, compared to USD 47.910 billion in December of last year. In other words, foreign debt shrank by USD 508 million in the first six months of the year. All told, each of Angola’s 36.2 million citizens owes USD 1.310 billion abroad, according to Expansão calculations based on budget execution reports published by the Ministry of Finance (MinFin).
China remains one of the country’s largest creditors, as of a total of USD 47.402 billion owed abroad, USD 13.417 billion is owed to that Asian country. In total, each Angolan now only owes USD 371 to the Asian giant, whereas, for example, in 2017 Angolans owed approximately USD 818, representing a drop of USD 447. In other words, the Angolan people’s debt has fallen by more than half (55%) in seven years and seven months.
And at the base is the fact that debt to China has been falling substantially for seven years (after peaking at USD 22 billion in 2017), mainly due to the Government’s aim to accelerate payments in order to end the oil-backed model, which is debt guaranteed by oil exports and which has three Chinese banks as its largest (and only) creditors (see opposite page).
Associated with this drop in debt per capita is also the increase in the population, which is growing at an average of 3% per year. In 2017, the population numbered 28.4 million, and currently it stands at around 36.2 million, according to INE data.
The Ministry of Finance (MINFIN) does not list all creditors nor does it present total debt by country. However, in the first quarter of this year, BNA data (which generally do not match verbatim data released by the Ministry of Finance) indicated that Angola’s external debt parked in the United Kingdom had already surpassed that of China.
For economist Yuri Quixina, the fact that external debt is falling is a positive sign, but he believes that any reduction in public debt without sustainable economic growth has an enormous cost for the population.
“In our case, it’s been the continued increase in taxes, killing some companies and businesses. And as a consequence, we have unemployment and impoverishment of families, as well as the economy as a whole,” he points out. He adds: “Those who pay the state’s debt are the taxpayers, the Angolan citizens. The greater the public debt without sustainable economic growth, the harder the government will dig into citizens’ pockets, the greater the sacrifice, and the country’s poverty will expand.”
External public debt is classified into six creditor groups: commercial debt (foreign banks), multilateral (international institutions such as the IMF and the World Bank), bilateral (state to state), suppliers, Eurobond subscribers and public company debt.
Thus, in the first half of this year, commercial debt, which accounts for 40% of total debt, also fell 1%, equivalent to USD 261 million, to USD 19.073 billion. Within commercial debt, the three largest creditors are two Chinese banks, namely the China Development Bank (USD 10.163 billion) and the Industrial and Commercial Bank of China (USD 3.994 billion), and the British bank Standard Chartered, to which Angola owes USD 1.441 billion.
Multilateral institutions represent 21% of Angola’s external debt, totaling USD 10,011 million at the end of the second quarter, with the largest creditors being the World Bank (USD 4,692 million), the IMF (USD 3,705 million), and the AfDB (USD 11,211 million).
Debt to Eurobond investors currently accounts for 19% of Angola’s external debt, while bilateral debt to other countries accounts for 8%. China is by far the largest creditor of Angola’s bilateral debt (USD 2.266 billion), followed by Portugal (USD 251 million) and Canada (USD 217 million).
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