Luanda - Angola has delayed the issue of its first sovereign Eurobond to 2014 from this year due to “internal factors” and is working to ensure the debt sale is successful in international markets, Finance Minister Armando Manuel said on Thursday.
“It is certainly a target for next year,” Manuel told Reuters on the sidelines of a ministry event in Luanda. “We are working on the financing needs for the 2014 budget and that's where we will decide on the value (of the planned issuance).”
“We restructured our debt plan and think it is pertinent to move to next year this effort in the international market, given that we devoted this year to refining a set of internal factors to prepare a successful outing to the international market,” he added.
Manuel did not disclose further details.
Angola, which is Africa's second biggest oil producer, planned a Eurobond issue in 2009 and again in 2011 only to postpone both sales. It had intended to raise $1 billion this year to follow successful sales by Nigeria, Zambia and Rwanda.
Analysts say demand for an Angolan Eurobond is likely to be strong as investors seek to tap into an economy which has posted rapid growth since the end of a 27-year civil war in 2002.
They add that political risk is limited - President Jose Eduardo dos Santos has been in power since 1979 - but warn that investors may require a premium due to Angola's weak record on transparency.
Angola is not strapped for funds, thanks to its oil exports, but government had said the planned debt sale was to fund increased spending on infrastructure and social conditions this year. It forecasts a fiscal deficit of 3.4 percent this year, compared to a surplus of 8.7 percent in 2012.
The government has also forecast economic growth of 7.1 percent this year, and Manuel said it was too soon to say whether that target would be reached. He added that the implementation of the 2013 budget was “running at good pace”.
“We have to highlight, however, that the economy has felt the problem of a drought and this translated into the agricultural component of the GDP, which will certainly see a deceleration in relation to the target,” the minister added.
The government in May said it would use budget funds to minimise consequences of the worst drought in three decades in the southern province of Cunene, where UNICEF says hundreds of thousands are at risk of malnutrition. - Reuters