Africa’s Second-Largest Oil Exporter Turns to Local Debt Market After Shelving Eurobond Sale
Angola has postponed plans to issue Eurobonds this year due to rising global uncertainties and falling oil prices that have dampened investor sentiment, a senior finance official said on Tuesday.
Dorivaldo Teixeira, director general of the Ministry of Finance’s debt management unit, explained that although a global roadshow earlier this year suggested favourable conditions for a sale in April or May, market instability prompted the government to reconsider.
The oil-dependent nation, which produced an average of 1 million barrels of crude per day in June, is grappling with fiscal pressures made worse by a decline in global oil prices, Bloomberg reported.
In response, the Angolan government has increased public transport fares by as much as 50%, following a decision to raise diesel prices by one-third as part of efforts to reduce fuel subsidies and stabilize public finances.
To bridge its funding gap, the government turned to domestic borrowing in the first half of the year, raising 2.2 trillion kwanzas ($2.4 billion) through fixed-rate debt issuances, a strategy aimed at reducing refinancing risks.
As of the end of June, Angola’s total public debt stood at approximately $61.9 billion. Meanwhile, the yield on Angola’s Eurobond maturing in 2028 rose by 7 basis points on Tuesday to 10.54%, reflecting investor unease.
