(Bloomberg) -- Angola’s Finance Ministry said it will extend the practice of paying local suppliers with Treasury bills because the oil-rich nation’s government doesn’t have sufficient cash.
The state may sell new securities to cover the payments to suppliers, Yona Amado, coordinator of arrears at the ministry’s Public Debt Management unit, said at a conference in Luanda, Angola’s capital.
“This may cause some discomfort for creditors,” Amado said. “But we must honor our commitments, which is why we may issue new debt to cover these expenses.”
Companies that need cash immediately can sell the Treasury bills in the secondary market, Amado said.
In addition to its struggle to pay suppliers, the southern African nation has delayed salaries of government workers. Most of the country’s revenue is used to service debt, with payments “automatically” debited from state accounts as soon as funds are received, and little is left to meet other obligations, Finance Minister Vera Daves de Sousa said earlier this month.
Angola must pay $1.1 billion monthly for domestic and foreign debt until December, while its revenue generation is a fraction of that amount, Luanda-based newspaper Expansao reported Aug. 12.
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