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The International Monetray Fund says the deteriorating macroeconomic outlook and fiscal policy response to mitigate the impact of the COVID-19 pandemic on Côte d’Ivoire is generating fiscal pressures and creating an urgent Balance of Payment need. Stanislas Zeze, Chairman and CEO of Bloomfield Investment Corporation joins CNBC Africa to explore ways the Ivorian government can navigate its economy through this pandemic.

COVID-19: Navigating Côte d’Ivoire’s economy through pandemic

By Jee-A Van Der Linde – Economist



The World Bank will grant Zimbabwe $7m to help fight the economic damage caused by the Covid-19 pandemic.



The Washington-based lender said it will mobilise $5m from its Global Financing Facility Trust Fund towards the outbreak and redirect roughly $2m from its ongoing Idai Recovery Project to communities in need.



The aid comes at a crucial time and despite Zimbabwe being in debt arears with numerous multilateral and bilateral lenders, which renders the country ineligible for new loans or debt forgiveness.



At the beginning of April, Finance Minister Mthuli Ncube wrote to the IMF as well as other leading international lenders, pleading for financial assistance. With more than half of the population in need of food aid and the entire world facing a health pandemic, conditions in the country have reached an acutely distressing point.



Zimbabwe can no longer go at it alone.



After having settled $107.9m of debt with the IMF in 2016, the country is still indebted to the World Bank, African Development Bank (AfDB), and European Investment Bank (EIB), while significant amounts are also owed to other creditors, both within the Paris Club and outside.



The debt situation is precarious, with total external debt (largely in the form of government debt) having ballooned to over $8bn, according to the Ministry of Finance (MoF).



The reasons for this come down to years of economic mismanagement and frequent policy errors.



That said, Zimbabwe is eager to restructure and repay its debt obligations in order to become eligible for new loans. Minister Ncube has previously said that settling arrears will help elevate the country’s credit standing, but a series of external shocks and policy missteps have impeded the process.



When considering Zimbabwe’s tremendous financing needs, the $7m – ZWL$125m at the current 25:1 fixed exchange rate with the greenback – is but a drop in the proverbial bucket and falls at the lower end of what the IMF and World Bank have afforded other African nations.



Although any bit of aid will help at this stage, Zimbabwe’s problems are far from over and it will need more assistance going forward.



NKC’s analysis shows that Zimbabwe will be among the continent’s main economic laggards this year, joining the ranks of oil producing nations which have arguably been the hardest hit by the global pandemic.



Simply put, Zimbabwe’s economy will suffer a very deep contraction in 2020, akin to levels last seen over a decade ago.



That said, conditions can only deteriorate so far and serious intervention will need to take place at some point.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

Zimbabwe tightens coronavirus lockdown in capital Harare as cases hit 203

Op-Ed: World Bank opens its purse to Zimbabwe, but hands out pennies

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As countries across Africa source intervention funds to battle the economic impact of the COVID-19 pandemic, with Nigeria’s economy especially taking a hit from falling oil prices and local currency devaluation, Sam Chidoka, Managing Director and CEO of Kairos Capital joins CNBC Africa to discuss how these events are impacting Nigeria&#8217;s economy.

Kairos Capital on IMF’s Africa COVID-19 strategy & Nigeria’s economic outlook

How far is the IMF in providing COVID-19 relief to Africa?

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Two weeks ago the African Union appointed a special envoy tasked with attracting social and economic support for Africa’s fight against the coronavirus. One of those appointees was former Rwanda Finance Minister and President of the African Development Bank, Donald Kaberuka, who joins CNBC Africa for an update of what the envoy has been able to achieve.

Donald Kaberuka: AU is looking for $100bn to fight COVID-19 on the continent

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The International Monetary Fund says Nigeria’s economy is currently threatened by the twin shock of coronavirus and falling oil prices. Joining CNBC Africa to discuss how these shocks are impacting the country’s investment climate is Vincent Nwani, Business and Investment Consultant.

How COVID-19 impacts Nigeria’s investment climate

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The International Monetary Fund has sited that the COVID-19 pandemic will cause the worst global recession since the Great Depression.

Absa on COVID-19 economic impact on SSA

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Since the COVID-19 pandemic, the IMF says it expects a 3.4 per cent economic contraction for Nigeria this year, while ratings agency Moody’s affirmed Nigeria’s B2 long-term issuer rating and senior unsecured rating and maintained a negative outlook for Nigeria. Bismarck Rewane, CEO of Financial Derivatives joins CNBC Africa for more.

Financial Derivatives CEO on how to mitigate the economic impact of COVID-19 in Nigeria

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Nigeria is requesting for a total of $6.9 billion loan from multilateral lenders to counter the impact of the coronavirus outbreak. With Nigeria&#8217;s total debt at 27.4 trillion naira, can the economy sustain more debt at these levels? Egie Akpata, Director of UCML Capital joins CNBC Africa for more.

COVID-19 loans: Can Nigeria’s economy sustain more debt?

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Ahead of the World Bank&#8217;s spring meetings this week, global movement; One Campaign is calling on the G20 finance ministers and Central Bank governors to provide immediate debt relief for the poorest countries. One campaign has also asked the G20 to provide $600 million to top up the IMF&#8217;s Catastophe Containment Relief Trust, which grants debt relief for public health disasters. Gayle Smith, President and CEO of the One Campaign joins CNBC Africa for more.

COVID-19: One Campaign calls for debt relief for poorest countries

In the wake of the global COVID-19 crisis, the <a href="https://www.cnbcafrica.com/videos/2020/04/07/how-the-imf-is-responding-to-africa-amid-the-covid-19-crisis/">International Monetary Fund (IMF)</a> Executive Board has approved immediate debt service relief to 25 poor and vulnerable countries.



Nineteen African countries will receive immediate debt service relief, including Benin, Burkina Faso, Central African Republic, Chad, Comoros, Congo, D.R., The Gambia, Guinea, Guinea-Bissau, Liberia, Madagascar, Malawi, Mali, Mozambique, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone and Togo.



The following statement provides more details:



April 13, 2020



Washington, DC – Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF) issued the following statement:



“Today, I am pleased to say that our Executive Board approved immediate debt service relief to 25 of the IMF’s member countries under the IMF’s revamped Catastrophe Containment and Relief Trust (CCRT) as part of the Fund’s response to help address the impact of the COVID-19 pandemic.



“This provides grants to our poorest and most vulnerable members to cover their IMF debt obligations for an initial phase over the next six months and will help them channel more of their scarce financial resources towards vital emergency medical and other relief efforts.



“The CCRT can currently provide about US$500 million in grant-based debt service relief, including the recent US$185 million pledge by the U.K. and US$100 million provided by Japan as immediately available resources. Others, including China and the Netherlands, are also stepping forward with important contributions. I urge other donors to help us replenish the Trust’s resources and boost further our ability to provide additional debt service relief for a full two years to our poorest member countries.”



The countries that will receive debt service relief today are: Afghanistan, Benin, Burkina Faso, Central African Republic, Chad, Comoros, Congo, D.R., The Gambia, Guinea, Guinea-Bissau, Haiti, Liberia, Madagascar, Malawi, Mali, Mozambique, Nepal, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo, and Yemen.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

IMF approves immediate debt relief for 25 countries amid COVID-19 crisis

IMF approves immediate debt relief for 25 countries amid COVID-19 crisis. shutterstock_94083223

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The International Monetary Fund has approved the payment of funds to a number of African countries such as Ghana, Senegal and Mozambique, under the Rapid Credit Facility which is set to help countries deal with the impact of the COVID-19 pandemic. Ridle Markus, Africa Strategist at ABSA Corporate and Investment Banking joins CNBC Africa for more.

IMF approves funds to Ghana

IMF approves funds to Ghana, Senegal & Mozambique to fight COVID-19

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Governments on the continents have put forward strict measures in an effort to fight coronavirus of which, the impact will be greatly felt across the economies. The World Bank and the International Monetary Fund have stressed on the need to provide debt relief to developing countries. Grant Harris, CEO, Harris Partners LLC joins CNBC Africa for more.

How African economies can survive the COVID-19 crisis

A group of 165 past and present global leaders have come together to demand the creation of a G20 executive task force and an immediate global pledging conference to approve and co-ordinate a multi-billion dollar fund to fight against the COVID-19 pandemic.



The following statement was issued by the Office of Gordon and Sarah Brown:



Media release



UNDER STRICT EMBARGO until Tuesday, April 7, 00.01 BST



GLOBAL LEADERS ISSUE G20 CALL TO ACTION URGING IMMEDIATE PLEDGING CONFERENCE AND TASK FORCE TO CO-ORDINATE WORLD RESPONSE TO COVID-19



 165 past and present leaders say to G20: approve now $8bn emergency global health funding to prevent second wave of coronavirus



<ul><li>Debt interest payments of poorest countries should be waived now; global fiscal co-ordination essential to avoid recession becoming depression</li></ul>



<ul><li>Warning that without rapid support, 1.2 million covid-19 deaths are possible in Africa and Asia’s poorest countries amid danger of igniting second round of disease in rest of the world</li></ul>



<ul><li>Race for vaccine, cure, test kits, ventilators and protective equipment for health workers &#8211; open letter says &#8211; demands enhanced co-operation and concerted global push to increase capacity</li></ul>



A 165-strong international group including 92 former Presidents and Prime Ministers, along with current economic and health leaders in the developed and developing world have come together to demand the creation of a G20 executive task force and an immediate global pledging conference which would approve and co-ordinate a multi-billion dollar coronavirus fighting fund.



In an open letter addressed to G20 leaders the group &#8211; which wants both to speed up the search for a vaccine, cure and treatments and revive the global economy &#8211; urges global collaboration and commitment to funding ‘far beyond the current capacity of our existing international institutions’.



“The economic emergency will not be resolved until the health emergency is addressed: the health emergency will not end simply by conquering the disease in one country alone but by ensuring recovery from COVID-19 in all countries,” the statement says.



The plea is for agreement within days for:



<ul><li>$8 billion to rapidly hasten the global effort for vaccines, cure and treatment;</li></ul>



<ul><li>$35 billion to support health systems, from ventilators to test kits and protective equipment for health workers;</li></ul>



<ul><li>And $150 billion for developing countries to fight the medical and economic crisis, prevent a second wave of the disease flowing back into countries as they come out of the first wave. This means waiving debt interest payments for the poorest countries, including $44billion due this year from Africa. A $500-$600billion issue of additional resources by the IMF in the form of special drawing rights is proposed.”</li></ul>



The letter also urges the co-ordination of fiscal stimuli to avoid a recession becoming a depression.



While welcoming the G20’s first communique on the Covid-19 crisis, the 165-strong group are pressing the G20 to speed up an action plan.



The group states: &#8220;All health systems – even the most sophisticated and best funded – are buckling under the pressures of the virus. Yet if we do nothing as the disease spreads in poorer African, Asian and Latin American cities which have little testing equipment, hardly any ventilators, and few medical supplies; and where social distancing and even washing hands are difficult to achieve, Covid-19 will persist there – and re-emerge to hit the rest of the world with further rounds that will prolong the crisis.



&#8220;World leaders must immediately agree to commit $8 billion – as set out by the Global Preparedness Monitoring Board – to fill the most urgent gaps in the COVID-19 response. This includes $1billion this year for WHO, $3 billion for vaccines and $2.25 billion for therapeutics.



&#8220;Instead of each country, or state or province within it, competing for a share of the existing capacity, with the risk of rapidly-increasing prices, we should also be vastly increasing capacity by supporting the WHO in coordinating the global production and procurement of medical supplies, such as testing kits, personal protection equipment, and ITU technology to meet fully the worldwide demand. We will also need to stockpile and distribute essential equipment.



“$35 billion will be required, as highlighted by WHO, to support countries with weaker health systems and especially vulnerable populations, including the provision of vital medical supplies, surge support to the national health workforce (70% of whom in many countries are underpaid women) and strengthening national resilience and preparedness.



“According to WHO, almost 30% of countries have no COVID-19 national preparedness response plans and only half have a national infection prevention and control program. Health systems in lower income countries will struggle to cope; even the most optimistic estimates from Imperial College London suggest there will be 900,000 deaths in Asia and 300,000 in Africa.



&#8220;We propose convening a global pledging conference – its purpose supported by a G20 Executive Task Force &#8211; to commit resources to meeting these emergency global health needs.”



On the Global Economic outlook, the group propose a range of measures and state:



&#8220;Much has been done by national governments to counter the downward slide of their economies. But a global economic problem requires a global economic response. Our aim should be to prevent a liquidity crisis turning into a solvency crisis, and a global recession becoming a global depression. To ensure this, better coordinated fiscal, monetary, central bank, and anti-protectionist initiatives are needed. The ambitious fiscal stimuli of some countries will be all-the-more effective if more strongly complemented by all countries in a position to do so.



“The long term solution is a radical rethink of global public health and a refashioning – together with proper resourcing – of the entwined global health and financial architecture.



“The UN, the G20 and interested partners should work together to co-ordinate further action.”



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

Clarification on COVID-19 “hotspots” as SA moves to level 3 lockdown

Global leaders issue G20 call to action to co-ordinate world response to COVID-19

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In Rwanda, IMF has confirmed that it has approved $109.4 million in credit to help address the COVID-19 pandemic. Moreover, The City of Kigali and Nyarugenge District Authorities have shifted some food trading activities from city markets to Nyabugogo Bus Park to decongest marketplaces, and RwandAir is working on launching cargo flights in the coming days to respond to demand in movement of good. CNBC Africa is joined by Hudson Kuteesa, Journalist with The Newtimes for more.

Rwanda gets $109mn from IMF for COVID-19 fight

By Irmgard Erasmus – Senior Financial Economist



Acutely aware of Ethiopia’s vulnerability to the health and
economic repercussions of the Covid-19 pandemic, Prime Minister Abiy Ahmed
urged “collective leadership and coordinated responses” to overcome the
challenges posed by the unprecedented shock. 



The Ethiopian leader has taken a dominant position in the campaign
for comprehensive stimulus packages and debt relief for the African continent,
stressing that “we are not prepared to overcome the virus on our health systems
and the long-term impact on our economies”. 



Echoing this concern, a consortium of African ministers of finance
emphasised in a communique dated April 1 that “urgent need” exists “for fiscal
stimulus to contain the crisis”.



On April 1, G20 leaders indicated that they are preparing a
response package for Africa that will include debt relief and financial aid.
The response package will incorporate “recent demands from President Cyril
Ramaphosa of South Africa and Prime Minister Abiy Ahmed of Ethiopia”, according
to Politico. 



This also came after the United Nations Economic Commission for
Africa (UNECA) again requested the “urgent and immediate release” of a $100bn
support package to aid domestic response actions in the fight against the
health and economic implications of the Covid-19 pandemic. 



While the ministers welcomed the IMF and World Bank’s call for
official bilateral creditors to “provide breathing space” to African countries,
the consortium believes that “such relief should be extended to countries
across the region and by other creditors during this exceptional period”. 



A comprehensive $100bn support package for Africa will be
formalised for discussion and presentation at the World Bank and IMF’s
stakeholders’ initiatives on April 15.



For the public sector, disbursements will be utilised for the
servicing of public sector debt and interest payments, including on sovereign
bonds, in order to create “immediate fiscal space and liquidity” for
governments to focus their attention on domestic fiscal stimulus needs amid the
crisis. 



The consortium proposes that the $44bn disbursement be pooled into
a global special purpose vehicle (SPV) to be used for external debt service
“for effective management purposes till economic recovery takes hold and
agreement can be reached with creditors”. The ministers stressed that this
measure would guard against default by countries. 



The ministers requested the IMF to raise Special Drawing Rights
(SDRs) availability over the next two to three years. The consortium believes
that it would service the debt relief SPV facility and provide crucial
liquidity support.



Ethiopia has already rescheduled debt servicing agreements with
“some major creditors”, which will alleviate hard currency liquidity demands.
By September 2019, public external debt stock stood at $26.8bn, or half of
total outstanding public debt. 



Public external debt comprised a 60:40 split between central
government and state-owned enterprises, according to official records. 



Public external debt servicing costs amounted to $548.4m during Q1
FY 2019/20 (the fiscal year commences on July 8), of which $457.2m was due to
SOE debt servicing. 



Ethiopia has been among the most vocal of African nations to
request debt waivers or debt relief – while African finance ministers called
for a $100bn stimulus package, Prime Minister Abiy Ahmed urged G20 members to
provide $150bn under a proposed three-point action plan. The disbursal should
take the form of supplementary budgetary support, debt relief, and private
sector financing, according to the proposal. 



The prime minister furthermore urged G20 nations to support the
World Health Organisation (WHO) and Africa Centres for Disease Control and
Prevention (CDC) in strengthening public health delivery and emergency
preparedness.



Cognisant of the fragility of the private sector, especially as
small- and medium-sized enterprises account for over 70% of the private sector
in Africa, the consortium stressed that liquidity relief should be extended in
particular to service and tourism sectors. 



African finance ministers requested support from the G20, EU, and
all Development Finance institutions to support a proposal aimed at the
refinancing, rescheduling, and implementation of guarantee schemes and
liquidity facilities for the private sector. 



In particular, African airline companies require preservation and
protection “given their significant contribution to the GDP of Africa”.
Ethiopian Airlines suspended flights to 80 destinations in light of the
pandemic. 



Demand for local flights, which are ongoing, dropped by at least
50% already. The airline estimates that it will lose at least $190m due to the
pandemic. 



The Ethiopian government has ordered the central bank to release
Etb15bn ($460m) to private banks as it ramped up its fight against the economic
spillover effects of the Covid-19 pandemic. The liquidity injection will enable
the banking sector to extend debt relief and additional loan facilities to
customers. 



This came in addition to instructions to avail foreign currency to
importers, with priority given to importers of essential goods or the
manufacturing of essential goods. 



In March, the World Bank granted a $500m grant and loan facility
(split evenly) to Ethiopia in support of its reform programme. 



The prime minister voiced his gratitude to “the generosity of the
Ethiopian people” as local stakeholders contributed generously to the National
Resource Mobilisation Committee initiative.



NKC African Economics’ preliminary GDP forecast suggests that
Ethiopia will be hit particularly hard by coronavirus-related disruptions. 



Absent comprehensive external support, a sharp slump in private
sector demand and investment momentum threatens an unprecedented plunge in
economic growth this year to 1.1% – down from a pre-virus forecast of 7.1%. 



Crucially, the pandemic threatens to disrupt progress made under
the reform agenda towards policy overhaul, broad-based privatisation of state
assets, financial liberalisation, and the launch of a domestic bourse. 



An uncomfortable reliance on grant relief amid strained domestic
fiscal capacity threatens to bloom into full-blown crisis in the absence of
comprehensive external financial support.

Lion_of_Judah,_Addis_Ababa,_Ethiopia

Op-Ed: Ethiopia – Abiy leads African appeal for relief actions

New York, March 31, 2020 &#8212; Moody&#8217;s Investors Service (&#8220;Moody&#8217;s&#8221;) has today placed Angola Government&#8217;s B3 long-term issuer ratings and senior unsecured rating and its (P)B3 senior unsecured MTN rating under review for downgrade. The short-term issuer rating is affirmed at Not Prime (NP).



The decision to place Angola&#8217;s ratings on review for downgrade is prompted by the magnitude of the shock from the sharp drop in oil prices and an acute tightening in global financing conditions on Angola&#8217;s already weak public finances and external position, and elevated government gross borrowing requirements. Weak governance, notwithstanding a number of reforms implemented in recent years, undermines the government&#8217;s capacity to respond to this shock and is a driver of this rating action.



The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. For Angola, the shock mainly transmits through a further weakening in the currency that raises the debt burden and debt service; a significant drop in revenues that is likely to prevent the government from pursuing its debt management strategy of paying down short-term debt and reducing rollover risk; and pressure on an already fragile balance of payments.



The review period will allow Moody&#8217;s to assess the overall policy response to the shock and the capacity of the authorities to manage: 1) the additional stress on public finances and the government&#8217;s balance sheet driven by the significant loss of oil-related revenues and a potential further depreciation of the currency; 2) the severity of the increase in external vulnerability given the expected sharp drop in oil export receipts putting pressure on foreign currency reserves; 3) the rising risks associated to large domestic and external debt service payments in a currently dislocated credit market.



Concurrently, all Angola&#8217;s country risk ceilings remain unchanged: Foreign Currency bond ceiling at B2, Foreign Currency deposit ceiling at Caa1, and Local Currency bond and deposit ceilings at Ba3.



RATINGS RATIONALE



RATIONALE FOR INITIATING A REVIEW FOR DOWNGRADE ON ANGOLA&#8217;S B3 RATINGS



As a result of the oil price fall in the face of depressed oil demand and a slow supply response, Moody&#8217;s now assumes that oil prices will average US$40-45 per barrel in 2020, and US$50-55 by 2021, around $20 and $10 below previous expectations in each year.



As a large oil exporter, Angola heavily relies on the oil sector as a source of government revenue (62% of total revenue in 2019) and exports (96%). Such a fall in oil prices heightens the pressure on Angola&#8217;s already weak fiscal and external metrics.



ANGOLA&#8217;S WEAK CREDIT METRICS ARE LIKELY TO DETERIORATE FURTHER, TO AN EXTENT PARTLY DETERMINED BY THE GOVERNMENT&#8217;S CAPACITY TO RESPOND



Angola&#8217;s credit profile is weakened by the oil price shock which negatively affects the government&#8217;s balance sheet and the country&#8217;s external position, through a significant loss of government revenue and export proceeds respectively. Also, the Covid-19 related spending to prevent the spread of the virus throughout the country is expected to further aggravate the fiscal deficit.



Already, Angola&#8217;s fiscal and external metrics are very weak. General government debt increased to an estimated 100.5% of GDP in 2019, from 81% in 2018, and debt-to-revenue was around 500% from 371% respectively. Similarly interest payment-to-revenue exceeded 25% in 2019 against 20.7% a year before. On the external side, vulnerability relates to low net foreign exchange reserves at $11.8 billion at the end of 2019, covering around 6 months of imports of goods and services and external debt amounting to about twice the level of current account receipts this year, according to Moody&#8217;s estimates.



Angola is unlikely to be able to significantly increase its oil production that has been in a secular decline for the last 4 years to offset the price drop. Moody&#8217;s estimates that a $10/barrel decrease in oil price leads to a $2$2.5 billion loss in government revenue (around 3% of 2019 GDP) and a $5 billion fall in exports receipts.



The 2020 budget which was designed to post a small surplus (0.8% of GDP), was passed with a $55/barrel oil price assumption. It would have contributed to a slightly positive balance of payments after International Financial Institutions&#8217; (IFIs) disbursements of concessional loans. As a result of the price fall, Angola&#8217;s fiscal and external accounts will be in deficit, raising pressure on the exchange rate and foreign exchange reserves and incentivizing economic transactions in the parallel exchange rate market.



A budget no longer likely to be in surplus and further pressure on the currency are likely to raise the already very high debt burden. In turn, the government&#8217;s borrowing requirements are likely to increase again in 2020 having fallen to 15% of GDP in 2019 (including clearance of arrears to goods and services suppliers), at a time when international and possibly domestic financing comes at very high costs. Given the current dislocation in credit markets, it will be increasingly challenging for the government to secure financing at affordable costs. Previous objectives, including an ongoing debt management strategy aimed at repaying short-term debt and lengthening its debt maturity and the maintenance of net international reserves above $10 billion have also become far less achievable.



The impact of the oil price shock will be attenuated by the fact that the government posted a small deficit on the budget estimated at 0.3% of GDP and a current account surplus estimated at 4% of GDP in 2019. This is due to the implementation of a vast array of reforms, and strong consolidation efforts under the $3.7 billion and 3-year IMF program, approved in December 2018. But during this transition period, where the authorities, with the support of the IFIs, are trying to spur the private sector, restore macroeconomic stability with a more flexible exchange rate and sounder public finances, having cleared large amount of arrears and improved the debt structure, Angola&#8217;s credit metrics remain highly vulnerable to shocks.



The review period, which may extend beyond the usual three-month horizon, will allow Moody&#8217;s to assess the credibility and sustainability of the government&#8217;s plans and its ability to mitigate the impact of significantly lower oil prices on Angola&#8217;s credit standing.



ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS



Environmental considerations are not material for Angola&#8217;s rating.



As an oil producer and exporter, Angola&#8217;s environmental risks derive from carbon transition. Angola&#8217;s credit profile would face downward pressure in a scenario of rapid global transition to lower reliance on hydrocarbons that would depress global hydrocarbon demand and prices. However, in light of the measures against climate change taken so far, this is not Moody&#8217;s baseline.



Social considerations influence Angola&#8217;s credit profile, given very low wealth levels and high levels of poverty. GDP per capita, at $6,851 on a PPP basis as of 2018, remains low. Additionally, the UN&#8217;s Human Development Index for 2018 ranked Angola 147 out of 189 countries. Social indicators have improved from a very low level since the end of the civil war in 2002, but income inequalities remain very high despite the oil wealth of the country. Since the oil shock and the election of President Lourenco, the authorities have been implementing an ambitious reform agenda despite the political cost and inherent execution risks. Risk of social unrest remains, especially stemming from jobless young people.



Governance considerations are material to Angola&#8217;s credit profile and are a driver of this action. Data transparency and availability are areas of improvements, as well as institutional capacities that remain limited. For example, Angolan banks lost their dollar-correspondent banking relationships in 2016 because of their failure to meet international standards relating to shareholder structures and money laundering, resulting in increased transaction costs and delays. There are also significant weaknesses related to the management of public finance, illustrated by the level of arrears accumulated over the last few years.



FACTORS THAT WOULD LEAD TO A DOWNGRADE OF THE RATING



Moody&#8217;s would downgrade the rating if the review were to conclude that Angola&#8217;s government was unlikely to be able to alleviate the damage to its balance sheet and the subsequent rise in liquidity risk resulting in a credit profile no longer consistent with a B3 rating. Increasing risks of a balance-of-payment crisis would also likely lead to a downgrade.



WHAT COULD LEAD TO CONFIRMATION OF THE RATING AT THE CURRENT LEVEL



Moody&#8217;s would confirm the rating if the review were to conclude that a credible fiscal and economic policy response from the government will efficiently manage the risks arising from the upward trend in government debt, government liquidity risks, and increased pressure on the exchange rate, leaving Angola&#8217;s credit profile consistent with a B3 rating.



GDP per capita (PPP basis, US$): 6,851 (2018 Actual) (also known as Per Capita Income)



Real GDP growth (% change): -1.2% (2018 Actual) (also known as GDP Growth)



Inflation Rate (CPI, % change Dec/Dec): 18.6% (2018 Actual)



Gen. Gov. Financial Balance/GDP: 2.2% (2018 Actual) (also known as Fiscal Balance)



Current Account Balance/GDP: 7% (2018 Actual) (also known as External Balance)



External debt/GDP: 44.4% (2018 Actual)



Economic resiliency: b2



Default history: No default events (on bonds or loans) have been recorded since 1983.



On 26 March 2020, a rating committee was called to discuss the rating of Angola, Government of. The main points raised during the discussion were: The issuer&#8217;s economic fundamentals, including its economic strength, have materially decreased. The issuer&#8217;s fiscal or financial strength, including its debt profile, has materially decreased. The issuer&#8217;s susceptibility to event risks has not materially changed.



The principal methodology used in these ratings was Sovereign Ratings Methodology published in November 2019 and available at <a href="https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1158631">https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1158631</a> . Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.



The weighting of all rating factors is described in the methodology used in this credit rating action, if applicable.



The local market analyst for this rating is Aurelien Mali, +971 (423) 795-37.



REGULATORY DISCLOSURES



For further specification of Moody&#8217;s key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody&#8217;s Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx? docid=PBC_79004.



For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody&#8217;s rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider&#8217;s credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.



For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.



The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.



These ratings are solicited. Please refer to Moody&#8217;s Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.



Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.



Moody&#8217;s general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at <a href="https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1133569">https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1133569</a> .



At least one ESG consideration was material to the credit rating outcome announced and described above.



The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody&#8217;s affiliates outside the EU and is endorsed by Moody&#8217;s Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody&#8217;s office that issued the credit rating is available on www.moodys.com.



Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody&#8217;s legal entity that has issued the rating.



Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.



Samar Maziad



Vice President &#8211; Senior Analyst



Sovereign Risk Group



Moody&#8217;s Investors Service, Inc.



250 Greenwich Street



New York, NY 10007



U.S.A.



JOURNALISTS: 1 212 553 0376



Client Service: 1 212 553 1653



Marie Diron



MD &#8211; Sovereign Risk



Sovereign Risk Group



JOURNALISTS: 852 3758 1350



Client Service: 852 3551 3077



Releasing Office:



Moody&#8217;s Investors Service, Inc.



250 Greenwich Street



New York, NY 10007



U.S.A.



JOURNALISTS: 1 212 553 0376



Client Service: 1 212 553 1653

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