The British consultancy Oxford Economics considers that Angola and Mozambique are among four African countries at risk of financial default due to the burden of debt, and that Mozambique is also likely to experience a depreciation of the metical this year.
“With regard to debt, there are risks of debt restructuring or financial default in four countries — Angola, Malawi, Mozambique and Senegal,” the experts write in an analysis of the main economic themes expected to shape sub-Saharan Africa in 2026.
In the report, sent to clients and cited by Lusa, analysts from the consultancy’s Africa department state that Angola also faces the possibility of having to raise benchmark interest rates due to currency developments and fiscal policy.
“Of the 24 economies we analyse, our outlook for interest rates is stable in 21 of them; there should be downward revisions in Egypt and Kenya, and we anticipate increases in Angola amid rising concerns over fiscal policy and currency conditions,” the analysts note.
Regarding Mozambique, Oxford Economics says that this Portuguese-speaking African country “is expected to gradually devalue the metical in 2026 to deal with the severe shortage of foreign-exchange reserves, which is mainly due to the overvaluation of the currency.”
The depreciation of the metical is also expected to be “one of the conditions for a new loan from the International Monetary Fund,” which is still under negotiation but which Oxford Economics expects to be concluded during this quarter.
In the report, the analysts also cut their growth forecasts for Angola and Mozambique this year, from 3.2% to 2.8%, and from 3.8% to 3.3%, respectively.
Concerns about the evolution of public debt and the capacity to repay creditors, particularly commercial Eurobond creditors (foreign-currency debt issuances), align with the widespread view that Africa is facing a public-debt crisis, with levels high enough to hinder investment in essential development areas such as education and health.
The United Nations Economic Commission for Africa (UNECA) said at the end of March that one of the region’s main problems was the high level of public debt, which was crowding out investment in infrastructure needed to foster economic development.
Even so, public debt in Africa is expected to fall from 62.5% in 2024 to 62.1% in 2025, after reaching 67.3% in 2023, but this decline is not sufficient to eliminate the debt crisis facing many countries in the region, the UN says.
“Debt levels remain high and are comparable to those recorded before the debt-relief initiatives of the mid-2000s,” reads the Economic Report on Africa (ERA).
Debt-servicing costs are estimated to have reached USD 163 billion in 2024, 12% more than the previous year, UNECA says, stressing that although 2024 may have marked the peak year for payments, “amounts will remain well above pre-COVID-19 levels in the short and medium term.”
In its latest assessment of Angola’s economy, in November, the credit-rating agency Fitch Ratings wrote that “debt reduction continues, but is slowing,” pointing to a gradual reduction in the debt-to-GDP ratio from 54.2% at the end of 2024 to 50% in 2025 and 48% in 2026.
“External amortisations are expected to peak at around USD 7.5 billion in 2025, up from USD 6.5 billion in 2024, with more than half [of payments] occurring in the fourth quarter of 2025, then declining to around USD 6.0 billion in 2026 and 2027,” the analysts wrote.
Source: Lusa
