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Angola Foreign Debt
Angola's total disbursed external debt, much of which
was owed
to the Soviet Union and its allies for arms purchases,
totaled
about US$4 billion in mid-1988. There was only a 0.3
percent rise
in medium-term and long-term debt in 1986, but the buildup
of
arrears after the crash in oil prices resulted in a 145
percent
increase in short-term debt. Arrears accounted for US$378
million,
including US$224 million owed to Western countries. In
1986 the
Soviet Union (Angola's largest creditor), Brazil (the
second
largest), and Portugal agreed to reschedule debt payments.
By the end of 1986, some debt payments were running
seven to
eight months late, and some Western export credit agencies
denied
Angola most medium-term and long-term credits. The
depreciation of
the United States dollar, to which the Angolan kwanza was
tied, has
added to the balance of payments pressure. This situation
existed
because Angola's oil sales were denominated in United
States
dollars, while many of its imports were priced in
relatively
stronger European currencies. By 1987 Angola's accumulated
arrears
(US$378 million) and its debt-service obligations (US$442
million
of principal and US$196 million of interest) equaled
nearly half of
its exports of goods and services.
The government in 1987 attempted to put together a
financial
arrangement to repay its external debts over a
fifteen-year period.
The minister of finance proposed raising US$1 billion on
the
international capital market through the issue of
fifteen-year,
floating-rate notes to pay off its arrears to Western
creditors, to
prepay principal due on nonpetroleum-related debts, and to
provide
approximately US$125 million in revenue. The
Paris Club (see Glossary), however, turned down the proposal because of
its
complexity, uncertainty over its success, and the cost
implications
for the creditor countries. To provide an alternative, the
Europeans advised Angola that they would consider debt
rescheduling
if the government would seek membership in the IMF.
Subsequently,
President dos Santos announced in August 1987 that his
government
intended to apply for membership in the IMF and the World
Bank.
* * *
Information on Angola continues to be difficult to
obtain. For
many years, government policies and the ongoing insurgency
discouraged visits by international organizations,
journalists, and
scholars. By the late 1980s, however, more information was
becoming
available. The most comprehensive source on the economy
was Tony
Hodges's Angola to the 1990s. Specific material on
economic
background was gleaned from Malyn Newitt's Portugal in
Africa and Gerald J. Bender's Angola under the
Portuguese. Publications of multilateral
organizations, such as
the UN and the World Bank, are helpful for data on various
aspects
of the economy. Useful periodicals include the Economist
Intelligence Unit's quarterly Country Report,
Jeune
Afrique, West Africa, Jornal de Angola,
Africa
Economic Digest, Africa Research Bulletin,
Marchés
tropicaux et méditerranéens, Afrique-Asie, and
Africa
Hoje. (For further information and complete citations,
see
Bibliography.)
Data as of February 1989
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