• Sat. May 14th, 2022

UPDATE 1-Extending G20 debt freeze would be very beneficial – Angola

ByTina R. Wimmer

Mar 11, 2021

(Add quotes, details, background)

LONDON, Oct 13 (Reuters) – It would be very helpful to expand a program of major economies to suspend debt servicing for poor countries during the coronavirus crisis, Angola’s finance minister said on Tuesday, promising a lean approach from his country.

Since April, the G20 group’s Debt Service Suspension Initiative (DSSI) has helped more than 40 developing countries defer at least $5 billion in official debt payments.

An extension is expected in the coming days, although it may only be until the middle of 2021 rather than the end as the debtor nations had hoped.

“We are very keen…to have more time regarding the DSSI, the debt suspension initiative,” Angola’s Vera Daves said during an online event as part of the Fund’s annual meetings. International Monetary Fund and the World Bank. “It is very useful for us”.

Africa’s second-largest oil producer has been hit by both coronavirus and an oil price rout, but Daves said Angola would have a conservative budget to try to keep debt under control.

The debt-to-GDP ratio is expected to hit 143% this year, according to ratings agency S&P Global. Daves wants to reduce it to 60% in the coming years and to less than 40% by the end of 2030 with the help of the IMF.

Angola’s government bonds lost more than half their value at the height of this year’s turmoil. They have since recovered strongly, but state finances were fragile even before COVID-19 hit, Daves said.

“We have to stay very conservative and very vigilant to make sure we stay focused and our debt remains sustainable.”

Angola has no Eurobond maturities until 2025, but coupon payments are estimated at nearly $700 million a year and repayments on Chinese and other loans are large, averaging $3. $.5 billion over the 2020-2023 period and nearly doubling to $6.2 billion in 2023, according to S&P.

It is, however, expected to receive $6.2 billion in debt relief over the next three years, due to settlements with three of its major creditors.

Reporting by Elizabeth Howcroft and Marc Jones; Editing by Andrew Cawthorne