Moody’s analyst notes Angola’s oil production “will recover, helping the government”

An analyst of the financial rating agency Moody’s that follows Mozambique and Angola on Wednesday said that the restructuring of debt securities, trade debt, the International Monetary Fund (IMF) programme, and the pace of structural reforms are the main points in 2019.

“In the short term, there is the issue of restructuring debt securities, to see if the restructuring is completed or not according to the terms presented, and after that, we need to know what happens to the rest of the debt; Mozambique has a fairly high debt level, and then there is the issue of the International Monetary Fund,” said Lucie Villa.

These issues “will be decisive and related” because “an IMF programme only exists if the debt is sustainable, and usually a restructuring is made to ensure the sustainability of the debt, and these are the three main elements we will be looking at from the credit point of view.”

Regarding Angola, Villa said that “all developments in oil are important, but our perspective is that oil production will recover, helping the government, and what will also be important is the scope and depth of the reforms that the government will be able to implement, in addition to the IMF programme.”

According to Villa, the great difficulty “is that the reforms are designed to improve the business environment, but the issue is often the implementation because it is necessary to see if it manages to follow the pace that the government has determined, and here the question remains open.”

The Extended Fund Facility (EFF), which comes after the agreement between the Angolan executive and IMF in 2008, is essential to consolidate the budgetary adjustment.

LUSA