Moody’s placed Angola’s sovereign debt on credit watch for a possible downward review of its rating, currently “Ba2”, the credit rating agency said in a statement Friday.
Angola’s sovereign debt is rated “Ba” by Moody’s and the agency considers it to be speculative and subject to a substantial credit risk.
The decision to place Angola’s debt under review, a process that should be completed within two years, aims to assess the extent of the impact on the Angolan economy of low oil prices, which according to the agency, should remain low for the next few years.
Angola is highly dependent on oil to sustain economic development and finance public expenditure, given that it accounts for 97 percent of exports, about 45 percent of gross domestic product and about 67 percent of government revenue.
Between September 2014 and September 2015 the price of oil fell by half and has since lost over 40 percent of its value. Moody’s expects that the price of Brent oil will be around US$33 per barrel in 2016 and US$38 in 2017, before rising to US$48 in 2019. (macauhub/AO)