Angola's economy faces major risks despite reforms

Significance

Twice oversubscribed, the success of the bond sale reflects an improvement in investor views of Angola’s economic outlook. In part this responds to the recent rise in oil prices, debt-service suspensions and the concrete achievements of three years of economic reform.

Impacts

• Debt yields will likely increase in the medium term, as lower growth affects perceptions of creditworthiness.
• The rising use of state resources to maintain political cohesion may jeopardise recent improvements in governance and fiscal management.
• Despite a growing opposition challenge, the ruling MPLA will likely retain its parliamentary majority in this year's elections.