ANGOLA

RISK RATING
Elevated
Default High Risk Score 5.80
Normal Average 4.10
Weighted Average 3.85
RISK RATING HISTORY
RISK RATING SCALE

Risk Rating Scale

Severe: 8.0 to 10
High: 6.0 to 7.9
Elevated: 4.0 to 5.9
Moderate: 2.0 to 3.9
Low: 0.0 to 1.9
EXCHANGE RATE
Country Outlook

A tempered economic recovery, sizable debt burden, and high inflation do not bode well for Angola’s risk outlook after five consecutive years of recession. However, a successful restructuring of some USD 6 billion in Chinese debt, a roll-out of planned privatisations, and improved Chinese demand for crude would enhance Angola’s prospects in the coming year. In the meantime, Angola will rely heavily on IMF assistance and other multilateral financial support. The main concern for Angola’s stability remains internal as mounting socio-economic grievances over economic mismanagement, high unemployment, and state corruption increasingly drive protests in major cities and trigger an often-violent reaction from security forces. While urban youths are more likely to stage violent protests and commit to civil disobedience in the short term, a swing in opinion among older age groups would cause a political shift away from the governing MPLA party in the 2022 national elections and the delayed local elections now due in 2021.

  • Corruption risks have resurfaced as legacy graft is being probed. Angola‚Äôs government has targeted a select set of political and business leaders associated with the previous administration in a high-profile anti-corruption campaign, which is aimed at meeting the IMF‚Äôs requirements on transparency to meet its conditions for funding support. However, prosecutions and asset freezes have been selectively focussed on a few individuals, often in blatantly politically motivated cases with little concrete evidence. Meanwhile, other figures who have been indicted in other jurisdictions or who are currently being investigated on corruption and other graft allegations have been appointed to senior posts in the Angolan government.
  • Violent political protests have become more frequent in major cities since mid-2020. Grievances include entrenched state corruption, massive unemployment, rising costs of living, and loss of political freedoms, while opposition parties such as UNITA have joined the protests. A heavy-handed approach by security forces to enforce coronavirus controls and regulations, including arbitrary detentions and beatings of those breaching the laws, have driven up anti-government sentiment. A more heavy-handed crackdown on Cabinda rebel groups is only likely to trigger a more hostile and violent reaction. The coastal areas, as well as Cabinda City and the Malongo oil terminal, are at very low risk of attack.
  • After five consecutive years of recession, Angola‚Äôs economic recovery may be muted. Its credit rating has suffered due to the shock from the sharp drop in oil prices and an acute tightening in global financing conditions on Angola‚Äôs already weak public finances and external position, as well as elevated government gross borrowing requirements. Participation in the World Bank‚Äôs Debt Service Suspension Initiative (DSSI) and Chinese debt restructuring in 2020 have mitigated the risk of sovereign non-payment, even though public debt now stands at 120 percent of GDP. The IMF has cautioned that debt dynamics remain highly sensitive to further oil-price volatility. The cost of servicing the debt accounted for 56.8 percent of total expenditure that was foreseen in the 2020 budget and could rise further.
CUMULATIVE AND DAILY COVID-19 INFECTIONS AND DEATH RATE
INTERNATIONAL MONETARY FUND | DATAMAPPER
Risk Perils
Political Instability
3.0
Expropriation, Nationalisation, Confiscation & Deprivation
4.8
Contract Frustration & Breach
3.5
Taxation
3.5
Bribery & Corruption
5.2
Regulatory Burden
4.0
Strikes, Riots & Civil Commotion
3.2
Security
2.2
Sovereign Default
5.8
Economic Volatiliy
5.8

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