Angola plans to balance public debt by 2020

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Samuel Pascoal

Angolan public debt and accounts are only expected to be out of the red-zone and normalise by 2020 with state revenues, especially from taxes, expected to improve.

This is according to government projections contained in the National Development Plan (NDP) 2018-2022, that has set out government programmes for the next four years.

For 2018, the government expects total revenue (excluding debt) of 20.2% of the gross domestic product (GDP), essentially from taxes on oil exports (12.6%), while total expenses are expected to amount to 22.7% of GDP, resulting in a fiscal deficit of 2.5%.

By 2019, the NDP projection points to a deficit of 1.5% of GDP, with revenues falling to 18.6% and total expenditure to 20.1%. After five years of accounts deep in the red-zone, the government estimates a positive result in 2020, returning revenues to exceed expenses, equivalent to 0.4% of GDP, projection rising to 0.5% in 2021 and to 0.7% in 2022.

Angola recorded fiscal surpluses in 2010 (5% of GDP) in 2011 (10%) and 2012 (7%), with the recovery of the oil sector after the failures of 2008 and 2009, close to balance in 2013.

Beginning in 2014, with a further dip in revenues from oil exports, the state's annual accounts have again consecutively presented deficits, offset by the contraction of public debt.

The government expects to close 2018 with a public debt of US$77.3 billion (65.1 billion euros), which is equivalent to 70.8% of the GDP, excluding the debt of state oil company Sonangol.

Angola was looking to borrow more money. In the first quarter of 2018, the government raised US$3.4 billion of which US$ 1.3 billion was sourced from the domestic market.

China alone has lent more than US$60 billion to Angola since 1983 for post-war reconstruction works, which are normally liquidated by the Angolan state with oil cargoes.

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