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In search of debt relief, Angola opens oil fields to China

This month, Angola reduced the number of oil shipments sent to China to pay off its debts, and also said it had asked for G20 debt relief.

Oil-backed loans represent about two-fifths of Angola’s external debt and most of its obligations to China.

Luanda and Beijing ”both have good reasons to move away from the current model“Oil used for debt service,” said Nick Branson, senior analyst for Africa at Verisk Maplecroft in London.

READ MORE Angola is coronavirus collateral damage hit by oil and China

Since entering an IMF program in December 2018, Angola has come under increasing pressure from the fund to pay off its secured debts, Branson said.

Verisk Maplecroft expects Luanda to offer Beijing an increase in equity stakes in the six oil fields where Angolan and Chinese oil companies are partners under the banner of Sonangol Sinopec International (SSI).

  • This would replace ongoing crude shipments and fit into Sinopec’s strategy to invest in high-quality production assets, Branson said.
  • Verisk expects Sinopec to acquire part of Sonangol’s stake in Total block 32 or Eni’s 15/06 block.

READ MORE Angola: on the trail of the stolen billions

Branson predicts that the regulator, the Angolan National Petroleum, Natural Gas and Biofuels Agency (ANPG) offer Sinopec preferential treatment in discovered resource opportunities, such as marginal fields, where tax conditions are attractive at lower crude prices, and undeveloped areas owned by dormant indigenous companies.

  • “It would be a much more attractive opportunity than the onshore blocks that the ANPG plans to offer as part of its 2020 license cycle,” he said.


Debt negotiations with Beijing have already started and it is “Really essential” for Angola to obtain some form of relief, says Thea Fourie, Senior Economist for Sub-Saharan Africa at IHS Markit in Centurion, South Africa.

READ MORE Coronavirus: how China intends to restore its image in Africa

  • She notes that in 2015-2016, Angola renegotiated bilateral loans from China and Brazil to reduce repayments.
  • Despite a partial rebound, oil remains well below the $ 55 per barrel assumed in the original 2020 national budget.
  • At current levels, according to Fourie, significant fiscal adjustments, including cuts in government spending and additional funding for a larger budget deficit, will be needed.

Juvelino Domingos, economist in Luanda, expects Angola to get debt relief from China and G20 if necessary.

  • “China is still determined to support Angola and ready to absorb some risks with the debt refinancing and, in an extreme scenario, to forgive some of it,” he said.
  • “The G20 decision may not be to the extent desired, but it can add value to the body of efforts that the executive has put in.”
  • The chances of not getting relief from the G20 are “remote,” he said.

Angola can make necessity a virtue by reduce losses suffered by public enterprises, says Domingos. “This can be achieved by speeding up the privatization process, divesting non-performing assets and limiting the recapitalization of these companies to well-defined restructuring plans.”

At the end of the line : Angola is in a good position to obtain debt relief, but must use it to rationalize its state-owned enterprises.

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Save the Children: Convert $ 60 billion in debt into funds to fight COVID-19 in the world’s poorest countries – World

Media contact: [email protected]

FAIRFIELD, Connecticut (April 14, 2020) – The world’s 75 poorest countries are expected to pay $ 60 billion in debt to external creditors in 2020 – more than they should receive donor aid to fight COVID-19 . This burden will rob them of the financial resources they need to invest in tests, medical equipment, health workers and safety nets to fight the epidemic, and push millions more children into poverty, a today notified Save the Children.

In one open letter to the G20 finance ministers ahead of the spring IMF and World Bank meetings, the agency is urging that the $ 60 billion in debt repayment be converted into an investment fund to fight the coronavirus pandemic.

“Providing aid through the World Bank and other donors while allowing commercial debt payments to absorb much of the transfer would be the financial equivalent of pouring water into a bucket. with large holes, ”the letter says.

Without suspension of debt payments, governments in sub-Saharan Africa will spend more on debt than on health, the agency warns.

The letter also states: “The governments of these countries are now faced with a heinous choice. They can either pay off creditors or invest in the frontline health services, safety nets and economic stimulus measures needed to alleviate the pandemic, fight poverty and restore inclusive growth. They can’t do both. If debt takes precedence over people, children will be the first and hardest hit. “

Save the Children has welcomed proposals to suspend payments from official bilateral credits owed to governments, but urges the G20 to go further. Commercial creditors account for nearly half of the total repayments of the poorest countries – and the agency wants banks, commodity traders and sovereign bond holders to match public debt relief.

“It’s not just a question of financial management,” said Janti Soeripto, President and CEO of Save the Children. “At the end of the day, it’s about the lives of vulnerable people and the future of children. Failure to act decisively now could set the stage for a “lost decade” marked by rapid setbacks in efforts to reduce poverty, malnutrition and child mortality.

With the bite of the economic recession, countries across the developing world are battling a deadly mix of COVID-19 and rising poverty. Based on recent World Bank growth projections, Save the Children estimates that an additional 22 to 33 million children could fall into poverty in Africa alone over the next year.

Save the Children calls for the G20 spring meeting to agree on a framework for an immediate suspension of debt service for countries seeking support, including:

The Paris Club of creditors, Chinese state creditors and creditors of Arab institutions to suspend repayments of principal and interest with immediate effect;

Commercial creditors should apply similar conditions, with compliance encouraged by making eligibility for COVID-19 recovery funding conditional on participation;

Increased funding to support multilateral debt relief through IMF and World Bank.

“Debt relief is not only the right thing to do for vulnerable people in poor countries, it is the smart thing to do for all countries. The coronavirus does not respect borders. If we fail to support governments and communities in the poorest countries, we could open the door to a resurgence of COVID-19 in countries currently flattening the curve, and a financial burden for the poorest countries including it will take years to recover, ”said Soeripto.

Save the children believes that every child deserves a future. Since our founding 100 years ago, we’ve changed the lives of over a billion children. In the United States and around the world, we give children a healthy start in life, the opportunity to learn, and protection from harm. We do whatever it takes for children – every day and in times of crisis – to transform their lives and the future we share. follow us on Facebook, Instagram, Twitter and Youtube.

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Kenya avoids debt reorganization in common G20 framework

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By Duncan Miriri

NAIROBI, March 10 (Reuters) – Kenya will not seek to review its debt under a G20 initiative because it fears it will reduce its ability to raise funds in global capital markets, a senior official said on Wednesday. responsible for the Treasury.

The G20 group of major economies introduced a “common framework” to help developing countries cope with the financial pressure of COVID-19 by allowing them to suspend bilateral debt service and then restructure their debts.

“We are not,” Haron Sirima, head of the Treasury’s debt management office, told reporters when asked if the government would seek to restructure its debt under the framework, which also involves private creditors. . He did not give more details.

Neighboring Ethiopia, which said it would go through “debt processing” through the common framework in January, suffered downgrades as a result.

Kenya could raise funds in international financial markets later this year if it does not get enough cheap funds from lenders like the World Bank, Sirima said.

The government will also use new issuance of sovereign bonds to refinance maturing debt and manage its liquidity and liabilities, he said.

The impact of the COVID-19 pandemic has weighed on Kenya’s tax revenues at a time when more of its debt is falling due and while it is still grappling with yawning budget deficits.

In January, it reached debt service suspension agreements with the Paris Club and other creditors, including China, covering the six months through the end of June this year.

Under the agreements, which are part of the G20 initiative to offer debt relief to poor countries, Kenya is deferring payments worth $ 600 million due during the period.

The deferred amount, which includes $ 378 million for China alone, will be paid over five years after a one-year grace period. (Edited by Larry King) (([email protected]; Tel: +254 20 4991239; Reuters messaging: [email protected])) Keywords: KENYA DEBT / (UPDATE 1, PIX )

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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