Angola is the African country most affected by drop in oil prices

11 June 2015

Angola was the African country most affected by the oil price drop, a factor that worsened the public accounts of the country and made debt sustainability more problematic, the vice president of sovereign debt rating agency Moody’s said in London.

Rita Babihuga said during a conference on sub-Saharan economies that although African countries were better prepared for the crisis than they were at the end of the last decade, “Angola was the country that saw its budgetary situation worsen most” in recent months.

This, he added, was creating a problem for state accounts, as the government’s response has been to make up the revenue shortfall with an increase in external debt, “which makes the issue of debt sustainability increasingly problematic,” which is getting close to 40 percent of the country’s Gross Domestic Product.

The use of international markets as a source of funding is one of the answers that Angola has found taken to deal with the shortfall in tax revenue, but the trend had already started before, recalled the Moody’s vice president for finance, Constantinos Kypreos.

Economic growth in sub-Saharan Africa as a whole is perceived positively by the rating agency, which expects growth in the region of between 4 and 5 percent, in the context of growth rates of the economies of oil-producing countries converging with growth rates of the other economies. (macauhub/AO)