Moody’s rating agency gives positive rating in its first report on Angola’s sovereign debt

16 July 2010

London, United Kingdom, 16 July – Strong economic growth prospects and improvement of public debt are the basis for the positive rating given to Angola’s debt, US rating agency Moody’s said Thursday.

“Angola’s rapid growth has significantly expanded its economy over the past decade, due to the development of its sizeable oil reserves,” said Anthony Thomas, Vice-President of Moody’s sovereign risk group.

These resources have allowed the government to fund an ambitious strategy to try to diversify the economic base beyond petroleum, but such efforts will take considerable time to bear fruit,” said the economist in the first report on the country after the agency and its counterparts for the first time attributed a rating to Angola.

The agency’s biggest concerns are related to fiscal transparency, particularly, “large and continued operations carried out by Sonangol,” Angola’s state oil company.

Thomas added that, taking into account the recent civil war, the government is facing serious challenges to increase fiscal transparency, responsibility and execution of economic policy.

“In our view, increased accountability for oil income and its disbursement will bolster budgetary resilience,” he said.

The B1 rating given to the country’s long term debt has a positive outlook, which means potential for improvement, and that, the agency said, is because it projects a more robust policy framework, including the establishment of adequate fiscal regulations at institutions and fiscal transparency, with the support of the International Monetary fund (IMF). (macauhub)