Angola Conducts Stress Tests Amid Oil Price Volatility, Considers IMF Loan
Angola is conducting stress tests to assess the potential impact of falling oil prices on its public finances, Finance Minister Vera Daves de Sousa announced on Friday. She noted that the situation increases the likelihood of Angola seeking financial assistance from the International Monetary Fund (IMF).
Speaking during the IMF Spring Meetings in Washington, Daves de Sousa said, “We are rolling out stress test scenarios,” emphasizing the government’s proactive approach to managing economic risks.
Following U.S. President Donald Trump’s announcement of sweeping tariffs, Brent crude futures briefly dipped below $60 a barrel — the lowest level seen in four years — before recovering slightly to close at $66.91 on Friday.
Daves de Sousa explained that if oil prices fall below $45 per barrel, Angola would be forced to introduce an additional budget to cover the shortfall. To prepare for such scenarios, she said the government is working to enhance tax administration, enforce property tax collection, and implement measures to cushion the economy from oil price shocks.
Angola, along with other smaller and riskier emerging economies, has been affected by recent volatility in fixed-income markets, particularly with U.S. Treasuries. Earlier this month, Angola had to make a $200 million payment after JPMorgan issued a margin call on a $1 billion total return swap loan, backed by the country’s U.S. dollar bonds.
Despite the unexpected payment, Daves de Sousa stated that feedback from investors and rating agencies remained positive. “There were no negative connotations. Instead, they were surprised at how quickly we had been able to raise such a large amount of money,” she said.
Regarding Angola’s outstanding oil-backed loans from China, Daves de Sousa noted that the country still owes about $8 billion. However, Angola now expects to repay the debt by 2028—earlier than the previously projected timeline of 2030-2031.
While Angola continues to borrow from sources like China’s EXIM Bank, Daves de Sousa clarified that these recent loans are concessional and allocated to specific projects, such as expanding rural internet access and improving education infrastructure. Importantly, these new loans are not secured by natural resource collateral.
Although Angola would like to return to international capital markets, Daves de Sousa admitted that current market conditions are not ideal. “We want to go on the market, but with the way things are going, this isn’t the right time. We will keep an eye on it to make sure we are prepared for the next time,” she said.
Finally, Daves de Sousa confirmed that officials from the Trump administration have reiterated their commitment to funding the Lobito railway corridor project, which is intended to transport minerals from central Africa’s copperbelt to the Atlantic coast. However, the exact funding amount has yet to be disclosed.
Source: Reuters
