The Angolan government is studying the issuance of bonds in the Chinese market and Islamic financing instruments known as sukuk, as it seeks to diversify its funding sources. No amounts or timelines have yet been defined, and upcoming decisions will depend on the completion of the 2027 General State Budget.
"We want to be able to diversify our sources of financing, rather than depending every year on the same markets or the same investors," said Ottoniel dos Santos, Secretary of State for Finance and Treasury, in an interview with Bloomberg cited by Lusa.
He added that Angolan authorities visited Qatar, the United Arab Emirates, and Oman in 2025 to establish contacts with potential investors. He clarified, however, that no new bond issuances in international markets are planned before the end of this year.
Angola raised four billion dollars through Eurobond issuances this year, of which $1.2 billion was used in debt management operations. According to Ottoniel dos Santos, these operations helped reduce repayment pressure projected for 2028 and 2029.
These issuances were complemented by access to the Japanese market through a yen-denominated bond — a Samurai bond — and oil revenues that exceeded initial projections. The official said remaining financing needs for the rest of 2026 stand at between $200 million and $400 million.
"The government will decide whether to seek bilateral loans, return to the Eurobond markets, or explore alternative financing instruments once the 2027 budget has been finalised," he stated.
Among the alternatives under consideration are Panda bonds — bonds issued by foreign entities in China's domestic market and denominated in renminbi — and sukuk, which are structured according to the principles of Islamic finance.
Sukuk instruments exclude the explicit payment of interest and instead tie investor returns to underlying assets or economic activities. They can take various forms, including lease income or profit-sharing arrangements. Islamic finance rules also prohibit the financing of certain activities, such as those related to alcohol and tobacco.
The push to diversify funding comes as Angola continues to face elevated debt service burdens. According to Moody's data cited by Lusa, the country will need to repay approximately $813 million in 2028 and $1.3 billion in 2029 in respect of bonds reaching maturity.
In September, the rating agency maintained Angola's sovereign credit rating at B3 and revised its outlook to positive, citing improvements in macroeconomic management.
"Improved macroeconomic management is contributing to a reduction in public debt and interest costs," analysts wrote, projecting debt equivalent to approximately 46% of gross domestic product and interest charges corresponding to 23% of revenues by the end of 2026.
Source: Diário Económico
Original article: https://www.diarioeconomico.co.mz/?p=554423
