Angola expected to start falling behind in payments to suppliers

12 June 2015

Angola is expected to start falling behind in its payments to suppliers due to the sharp fall of oil prices and consequent lack of foreign currency, the Economist Intelligence Unit (EIU) said in its report on the West African country.

“The government is trying to alleviate the problem caused by the drop in oil prices and the consequent shortage of foreign exchange, promoting initiatives not related to oil, but the lack of foreign reserves is stifling efforts to develop other sectors of the economy,” reads the document.

The Angolan national currency depreciated by more than 6.6 percent last week, according to the official exchange rate of the National Bank of Angola (BNA), which was not enough to slow the rise of the dollar on the informal market.

This devaluation was mainly in three daily sessions of last week due to operating conditions of the forex market, but remains well below prices in the informal market, which is the only solution to difficulties faced by customers in access to foreign currency at commercial banks.

The result, said the EIU, “led the National Bank of Angola to impose restrictions on withdrawals and international transactions,” causing difficulties for some companies.

“There are several companies that are reporting difficulties in paying foreign suppliers and processing salaries, and this has created problems in several economic sectors, including construction and industry,” analysts said.

As a sign of these difficulties, the Angolan President asked the Chinese government for a moratorium of at least two years on paying off the debt to that country and requested new credit facilities or the expansion of existing ones. (macauhub/AO)