The Angolan government plans to raise a total of 10 billion kwanzas (11 million euros) to cover the deficit in the 2024 General State Budget (GSB), as set out in this year’s Annual Debt Plan (PAE).
The PAE, approved by Presidential Decree no. 02/24 and consulted today by Lusa, states that 6.1 billion kwanzas (6.6 billion euros) must be raised from the foreign market and the rest from the domestic market.
According to the order, signed by Angolan President João Lourenço and published in the Diário da República, the PAE materialises the financing strategy for the 2024 State Budget, “taking into account the sources of internal and external financing, as well as the limits of the level of indebtedness considered sustainable”.
This legal instrument should favour the contracting of instruments that help active liability management, promote the elimination of exchange-indexed bonds, improve the maturity profile of public debt, encourage benchmark bonds and promote the secondary public debt market.
The 2024 State Budget, which sets out expenditure and estimates overall revenue of 24.7 trillion kwanzas (27.9 billion euros), began to be implemented on 1 January 2024.
At least 57.8 per cent of the total budget expenditure for the 2024 financial year, estimated at 14.3 trillion kwanzas (16 billion euros), will be allocated to servicing public debt, both domestic and foreign.
According to the PAE, around 81 per cent of the Angolan government’s debt stock “has exposure to exchange rate risk, namely Treasury Bonds (OT) in national currency indexed to the exchange rate, OT in foreign currency, Loan Contracts with local banks in dollars and euros and the entire stock of foreign debt”.
In another decree, João Lourenço also authorises the Minister of Finance to resort to issuing OT “with the characteristics and conditions” set out in the 2024 State Budget to cover the financing needs arising from public investments.
The OT can be placed directly with financial institutions, through a quantity or price auction; through a consortium of financial institutions; through limited subscription and directly with the public, the decree states.
To finance the 2024 State Budget, the Angolan finance minister is also authorised to issue Treasury Bills (BT).
The decree was approved due to the need to “broaden” the participation of financial institutions established in Angola in the process of financing the 2024 State Budget, “by subscribing to Treasury Bills to be issued especially for this purpose”.
Presidential Decree no. 01/2024, to which Lusa has had access, approves the rules for implementing the 2024 State Budget, determining that all state revenues, including customs, those resulting from the sale of the state’s real estate and furniture, taxes and similar revenues, must be collected via the Single Reference for Payment to the State (RUPE), in the Single Treasury Account, “regardless of whether or not they are allocated to any budgetary unit”.
The budget units “are not authorised to open and maintain bank accounts in their own name domiciled with commercial banks without having been authorised by the Minister of Finance, based on the grounds presented by them”, the document signed by João Lourenço also stresses.
