Debt Reduction Goals: Angola Targets 63% of GDP by 2025

February 5, 2025

(3 Minutes Read)

Angola has presented an ambitious fiscal strategy aimed at reducing its public debt to 63% of GDP by 2025, demonstrating a strong commitment to macroeconomic stability and long-term financial health. Under the leadership of Finance Minister Vera Daves, the government plans to reduce the country’s debt to €55.27 billion, an important move to boost investor confidence and promote economic growth. This plan comes as Angola continues recovering from the pandemic, with an emphasis on debt management reforms and responsible borrowing.

A central component of this approach is the government’s projection that debt servicing will reach 13 trillion kwanzas (€12.89 billion) by 2025, while it plans to borrow approximately 14.6 trillion kwanzas (€14.22 billion). By adopting a careful borrowing strategy and meeting its obligations, Angola aims to balance fiscal responsibility with economic growth. Reducing the debt burden will free up resources for key sectors like infrastructure, healthcare, and education, which are essential for sustainable development.

The Annual Borrowing Plan, announced this week in Luanda, outlines steps to achieve this goal, underscoring the government’s dedication to fiscal discipline and prudent debt management. Authorities have stressed the importance of attracting foreign investment and diversifying income sources to maintain financial stability. To support this, Angola is seeking partnerships with multilateral institutions and private investors, positioning itself as a reliable participant in the global financial market.

Angola’s debt reduction strategy is closely linked to broader efforts to diversify the economy, especially in oil, agriculture, and manufacturing. While oil revenue remains a major income source, the government is working to reduce dependence on crude exports by fostering growth in non-oil sectors, enhancing the country’s economic resilience. Fiscal reforms and structural adjustments are expected to create a more balanced and competitive economy, reducing susceptibility to external shocks.

Despite these efforts, Angola faces challenges such as exchange rate fluctuations, inflation, and volatile commodity prices, which may impact its ability to meet debt reduction targets. However, with improved governance, transparent fiscal policies, and stronger economic diversification, the country is well-positioned to reach its 2025 objectives. The government’s focus on long-term sustainability will be key to ensuring Angola’s economic stability beyond short-term debt reduction goals. As Angola progresses with its fiscal consolidation plan, the international investment community will be closely watching its success in achieving economic stability and debt sustainability. Meeting these goals will not only strengthen Angola’s credit rating but also open new opportunities for growth and development, reinforcing its position as a rising economy in Africa.