Angola’s debt to China fell by USD 351 million in the first quarter, to USD 21.4 billion, according to data from REDD Intelligence.
The rise in oil prices is helping the Portuguese-speaking African country, the second largest oil producer in sub-Saharan Africa, to reduce debt to Chinese creditors, according to data quoted by the South China Morning Post.
Angola´s debt to Chinese creditors has remained stable at USD 22 billion in the last two years, but the Angolan Government had vowed to start bringing it down.
Angola’s revenues rose from USD 1.4 billion in April this year to USD 2.1 billion in May, according to with government data, owing to the doubling of crude prices compared to 2021.
Payments to Chinese creditors began in the first quarter of the year, 18 months ahead of schedule, as the suspension of debt service meant that payments would only resume at the end of the first half of next year.
According to Africa Monitor Intelligence, Angola’s debt to China, estimated at 40% of registered external debt, is mostly derived from loans contracted with Chinese banks, especially Exim Bank and BDC.
Chinese loans, which represent about a third of Beijing’s claims on all African countries, were essentially intended to finance infrastructure projects (construction or reconstruction) and others, of an industrial nature.
Under a mechanism called “Angola Mode”, Angolan oil supplies, carried out under special price conditions, are intended to pay off Chinese investments in these projects, Africa Monitor added.