Angola’s Development Bank (Banco de Desenvolvimento de Angola, Banco de Desenvolvimento de Angola) will apply an interest rate between 7.5% and 10% for the agro-livestock sector, “ensuring the financial sustainability of the institution and more accessible rates,” according to a statement from the Council of Ministers.
The proposed amendment was reviewed during the 1st meeting of the Economic Commission of the Council of Ministers and forms part of policies aimed at boosting domestic production.
Speaking to the press in Luanda after the meeting, Finance Minister Vera Daves de Sousa said the previous BDA regime will continue to apply to non-agricultural loans. The new framework sets maximum limits for the total cost of credit, including interest rates and directly related fees, as follows: up to 7.5% per year for agro-livestock investment loans (infrastructure, equipment, modernization, and expansion) and up to 10% per year for operational loans (working capital and input purchases).
The Development Bank of Angola currently applies a reference interest rate of 13.55% per year for its financing programmes.
The proposal does not include any compensation mechanisms from the National Treasury to the BDA beyond the capital injections already made by the state. It will apply not only to new loans but also to existing ones, provided they are not in default, added Vera Daves.
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The minister added that the executive deemed the reduction necessary after engaging with multiple borrowers whose projects have merit and could positively impact production growth, but who struggle to achieve profitability under current interest rate levels.
