“Angola’s rating reflects weak governance indicators, high inflation relative to peers, high levels of public debt in foreign currency, and one of the highest dependencies on raw materials” among the countries analyzed by Fitch, the analysts write.
In the note accompanying the maintenance of the sovereign credit rating’s position at B-, below investment grade, Fitch highlights that “current account surpluses and international reserves are above the median of its peers, providing some protection against lower oil prices and still low concessional financing.”
In the analysis of this Portuguese-speaking African country’s main economic indicators, the second-largest oil producer in sub-Saharan Africa, Fitch states that “debt reduction continues, but it is slowing,” indicating a gradual decrease in the debt-to-GDP ratio from 54.2% at the end of 2024, to 50% this year and 48% in 2026, “due to moderate primary surpluses and nominal growth.”
On the other hand, they add, concessional financing, that is, below commercial loan rates and with longer maturities, is limited, making the cost of servicing the debt more expensive.
“External amortizations are expected to peak at about 7.5 billion dollars in 2025, compared to 6.5 billion dollars in 2024, with more than half [of the payments] occurring in the fourth quarter of 2025, then decreasing to about 6 billion dollars in 2026 and 2027,” the analysts write.
Fitch also warns that “interest costs will remain high due to high internal and external financing costs and limited access to concessional financing for budgetary support,” with the ratio of interests to fiscal revenue at 28%, nearly double the average of 15% recorded in countries with a B-level rating.
