(Bloomberg) -- Angola faces peak loan payments that require the oil-producing nation to use all of its fiscal revenue to pay salaries and to service debt, its finance minister said.
“This has been a very demanding year in terms of debt service,” Vera Daves de Sousa said in a video interview with Angolan magazine Economia & Mercado that was broadcast online. “We are experiencing a high peak not only in terms of our external debt service, but also to service internal debt.”
Angola is currently holding talks with the International Monetary Fund about a possible new program, Sousa said in an interview with Bloomberg News this month. The move takes place after the African nation resumed debt payments to China, its biggest creditor, following a three-year moratorium.
The “good news” is that Angola’s fiscal revenue is enough to cover its debt obligations, Sousa said. The “challenging news” is that this revenue only pays for salaries and debt-servicing costs, she said.
“The rest is covered with revenue from financing,” said Sousa.
The Finance Ministry is trying to identify opportunities to lower the country’s debt burden by anticipating some debt payments, seeking better loans and by switching existing debt with cheaper financing, Sousa said.
The goal is to lower Angola’s debt to about 60% of gross domestic product in the “medium term” from about 74% to 75% at the moment, she said.
“We are always proactively managing our debt to keep it sustainable and to progressively reduce its weight on the state budget,” said Sousa.
--With assistance from Candido Mendes.
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