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The MPLA government (the only one that has known Angola since 1975) plans to reduce the ratio of public debt to 60% of gross domestic product (GDP) by 2022, a target initially included in the government's objectives for this year and a debt index The objective appears in the National Development Plan (NDP) 2018-2022, approved by the Government and formally published at the end of June, containing a set of programs with the Government's strategy for national development in the current legislature
The document expressly sets the goal of "reducing the debt-to-GDP ratio by 67% in 2017 to 60% by 2022 "and to ensure the sustainability of the public debt through the implementation of a debt management strategy. In 1965, the ratio of Angolan public debt was about 46% of GDP and 25% in 2013.
Due to the crisis (the reception at the MPLA continues to solidify its system (slave ), financial, economic and foreign exchange due to the decline in oil export earnings, which drags on since 2014, the MPLA government relies on debt issuance and external financing to ensure continuity of public projects
At the end of 2016, the government even advanced with an amendment to the law on the legal regime for the issuance and management of direct and indirect public debt. is more bound by the legal obligation not to exceed a level of debt equivalent to 60% of GDP, and this limit is only a reference.
In practice, the government's improved public finance management program for the current legislature, until 2022, pre sees intervention at the level of "revenue collection, seeking to improve the predictability of the state's treasury" and assuming (that is!) the commitment to "the allocation of resources" so that "is strategic and that service delivery is effective. "
" We must change the current trajectory of the debt, otherwise we will mortgage future generations. Therefore, the objective should be to use the differential obtained by the differential oil price, compared to the reference price defined in the state budget, to reduce the pressure on debt, "said Finance Minister Archer Mangueira.
The government plans to raise 6.721 billion kwanzas (22,800 million euros) of public debt in 2018, for a total of 54,500 million euros of debt by the end of the year. According to the document prepared by the Ministry of Finance, these needs amounted to Kp4,762 billion (€ 16,100 million) to be subscribed for in internal debt and to € 1,959 billion. kwanzas (6,600 million euros) in external disbursements, aim to "meet the financing needs" of the 2016 budget.
"The stock of public debt is expected to continue the trend of growth observed the years previous, which is based on a higher share of debt denominated, "says the document, indicating an increase of 18% over 2017.
To comply, on the other hand, Economic growth (morphic and delusional ) by 4.9% in 2018, the ratio of Angolan public debt should reach 60% u GDP of the country by the end of the year. However, the government has already revised the growth outlook to 2.2% in 2018 compared to the previous year. Other downward revisions will be made because the reality is not proportional to the regime's demagogic propaganda
Custom Accounts
E Although it is known that the accounts, namely those related to public debt, are what the MPLA wants them to be, although it reaches or exceeds 70% of GDP.
The increase in the public debt was mainly due to the depreciation of kwanza against the dollar and the financial support granted. Last year, state-owned enterprises (MPLA) surpassed $ 74 billion, or about 66 percent of GDP, by the end of last year.
Combining all this with the current monetary adjustment and the elimination of The Moody's, for example, has seen in Angola (unlike the MPLA) that the deterioration of balance of payments and the deterioration of the balance of payments. Increased funding requirements due to Sonangol's debt takeover
Will the government have the capacity and willingness to deal with the sustainability of the debt trajectory? Doubts are more than certainties. In addition to the erosion of key indicators, there is also more immediate pressure on Angola's credit profile, which reflects increasing liquidity pressures and the increasingly difficult challenge of investing in Angola. to obtain the necessary financing to guarantee the high needs of financing of the government,
The cost of interest of the debt, that is to say the value that Angola only pays in interest on the money it borrows or on issues to 21% in 2017, up 16% in 2016, and this year will continue to increase.
The executive of João Lourenço intends to diversify the external financing mechanisms, admitting the depletion of the barrels of loading model as a guarantee of the credit lines of the financing countries, such as than China. But do you even have alternatives?
It is recalled, although this exercise of memory irritates the MPLA, that the president João Lourenço devalued on January 8 the process of renegotiation of the Angolan public debt envisaged (19659004) the head of the State answered the Luanda's presidential palace to questions asked by reporters at the first press conference (scheduled annually) "
" Debt negotiation is a quasi-permanent process, which all governments are doing, in order to find better conditions for honoring their commitments to creditors, not for fleeing their responsibilities, "recalled João Lourenço, adding that" one of the results is always to seek to renegotiate. "
" The Macroeconomic Stabilization Program (MSP) reinforces the need for fine management of the internal and external public debt portfolio, using the market instruments available to it, among others, to promote fungibility of the bonds, "the statement said.
He adds that for the domestic market, "the Ministry of Finance may, where appropriate, make early redemptions", while on the foreign market, the "objective" is to refine the management of the Ministry of Finance. Finance reiterates its commitment to creditors to fulfill the purpose of servicing domestic and external debt. "
which is already reflected in the proposal for the 2018 general state budget and supported by current levels of state cash, "the statement said.
With a central government public debt volume exceeding 61 percent of GDP by the end of 2017, PEM recognizes that the external debt "has increased significantly."
The Government acknowledges that Angola has resorted to funding "Public Investment Program (PIP) Project Portfolio", a state-to-state line of credit system, generally supported by exports and variable rate insurance, which was "the most important". renewal and requalification of national infrastructures. "
Some of these financings are secured by oil shipments, but João Lourenço leaves the warning:" The line of credit system has the advantage of allowing greater access to external financing. . However, there is currently a situation of depletion of this instrument, as oil shipments have been fully engaged in the debt service of three countries: China, Brazil and Israel. "
Record 8 with Lusa
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