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Sat, 19 Sep 2020 07:31 - Updated Sat, 19 Sep 2020 07:31

Angola owes USD 20.1 bln to China

Luanda - Angola's debt to China is estimated at USD 20.1 billion, and is the country's largest creditor, said Finance Minister Vera Daves Friday.

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Minister of Finance Vera Daves

Photo: Francisco Miudo

Of this amount, USD 10 billion was used to capitalize the Angolan oil company Sonangol and the remaining USD 10.1 billion to finance various investment projects.

Speaking at a press conference, Vera Daves said that the issue of China's financing to Angola has generated a lot of controversy when analyzing the quality of the works carried out by Chinese contractors.

However, the minister explained that the quality of the works does not depend on the creditor -  Chinese banks - but on the Angolan State that must inspect them, and on the contractors.
 

Vera Daves said that upon payment, the paying bank is based only on the invoices presented on the execution of the works. The bill is paid in China and the money does not circulate in the Angolan economy.

"There is always a very strong debate about deliverables, the quality of the works. This does not depend on the financier but on the relationship between the Angolan State and the contractors", she said, explaining that the financing entity, which is a bank, focuses on the invoices and not on the walls.

As for the debt service with China for 2020, standing at USD 2. 678 million, the minister said that the amortizations represent 78.8%, that is 2,103, while interest represents 21.2% (567 million).
 

She explained that the debt with that Asian giant is commercial and is paid in deadlines of up to eight years, unlike that with the IMF, which allows negotiation of interest rates and repayment terms.
 

On the discharge of the public debt, estimated at about 90% of GDP and 60% of the General State Budget 2020 (AKz 13.5 billion), ie, USD 5 billion, according to analysts from the Fitch Rating Agency, the director of Public Debt, Valter Pacheco,  Angola needs at least 29 years.

However, the official explained that this is just a hypothetical example should the country  no longer incur any debt. But this is not the case because the country needs to finance itself to meet needs.
 

“We will continue to go into debt, but in a more productive and responsible way. Angola will have to continue to finance itself, but with lower interest rates and longer terms ”, said the official.

Tags Economy  

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