The financial rating agency Moody's decided on Tuesday to keep Angola's rating at 'B3' and the outlook positive, reflecting the government's efforts in the area of public finances and exchange rate management.

"Moody's decision to maintain the positive outlook reflects the government's efforts to restore robust public accounts and improve exchange rate management," reads the note released this afternoon in London, which maintains the 'B3' rating, below the investment recommendation.

Quoted by Lusa, Moody's analysts write that "the government's commitment to maintaining an almost balanced budget, even in the event of a drop in oil revenues, signals a gradual improvement in governance", so over the next 12 to 18 months Moody's will continue to analyze "whether the government manages to reverse the deterioration in the debt burden witnessed in 2023 and whether the exchange rate risk has decreased in a sustained manner".

According to Moody's, the maintenance of the opinion on credit quality at 'B3', five levels below the investment recommendation, "reflects the current high level of the weight and cost of debt, as well as a high exchange rate risk," together with the slowness of the energy transition, since Angola "will take time to reduce its structural vulnerability to shocks in the oil industry, which continues to be a volatile sector.

In its note to investors, Moody's considers that state revenues will benefit from the stabilization of oil production at around 1.1 million barrels per day until 2030, during which time there should be "significant investments in ultra-deepwater projects".

On the other hand, if there is no further depreciation of the currency like the one that occurred in the first half of the year, in which the kwanza sank by around 40% against the dollar, "the increase in the debt burden to 78% of GDP in 2023, which compares with 61% last year, can be completely reversed by 2025″, Moody's economists believe, also predicting that the ratio of debt to revenue will fall below 250% and the ratio of interest payments to revenue will fall to around 20%".

Furthermore, they conclude, the level of debt requirements is expected to be around 8% of GDP in 2024 and 2025, after having been 11% this year.