Public sector companies and Angola should only take on debt in the domestic market

26 July 2019

Debt-taking by public sector companies should favour the domestic financial market in domestic currency, according to an executive decree signed by the Angolan finance minister, the ministry said in a statement.

The decree, intended to establish standards and procedures for indebtedness in the period from 2019 to 2021, clarifies that the decision to prioritise debt in the domestic financial market in Angolan currency aims to reduce exposure to foreign debt and foreign currency.

Loans negotiated by public and public domain companies must have medium and long-term maturities, extending the grace and repayment period, according to the decree that also directs the target entities to submit a debt plan for approval by the Minister of Finance in the first quarter of each calendar year.

The plan should contain information on projected borrowing needs, potential lending institutions and the general conditions for the acquisition of loans, and requests that in the negotiation of operations, the lending institution must require proof of approval by the Ministry of Finance of the debt plan of public or publicly owned companies, as a condition for granting credit.

Archer Mangueira stated in parliament, in the discussion of the State Budget, that public debt at the time amounted to 22 billion kwanzas (about US$62.964 billion), 79.7% of which was government debt and the remaining 20 billion, 30% was corporate, mainly from Sonangol and airline TAAG and state guarantees. (Macauhub)