Fitch Affirms Angola at ‘B-‘ with Stable Outlook
Fitch Ratings has affirmed Angola’s Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) at ‘B-‘ with a stable outlook. Angola’s ratings reflect weak governance indicators, high inflation, high levels of foreign-currency-denominated government debt and one of the highest commodity dependences among Fitch-rated sovereigns, Fitch said.
Ratings analysts explained that these constraints are offset by current account surpluses, international reserves above peer medians, and a declining government debt ratio.
Fitch said the stable outlook reflects its view that risks to the ratings are broadly balanced. Higher oil prices could generate windfall revenues, supporting fiscal consolidation and external buffers, but this upside is offset by the risk of expenditure slippage, particularly in the context of approaching elections.
Additionally, the expected rebound in oil production remains uncertain, potentially offsetting some of the gains, while analysts anticipate the external surplus will rebound.
Fitch forecasts international reserves will rise in 2026, providing an adequate external buffer, despite large external debt amortisations of 3-4% of GDP expected through 2027 and a larger peak anticipated in 2028.
International reserves were broadly stable in 2025, reaching approximately 6.2 months of current external payments, above the ‘B’ median of 4.3 months.
“We project the current account surplus will significantly widen in 2026, from 0.4% in 2025, due to higher oil prices and production, as new oil fields come on stream”.
Import reduction from major upstream projects nearing completion will be offset by high fuel and broader goods import costs, compounded by the country’s still-limited local refining and fertiliser capacity pending completion of ongoing projects.
“We estimate the general government deficit was 4.5% of GDP in 2025, with a small primary deficit of 0.4%, as oil revenue shortfalls outweighed savings from partial fuel subsidy reform.
“We forecast the deficit will narrow in 2026 and return to a primary surplus due to higher oil revenues (approximately half of receipts).
“Non-oil tax revenues are projected to reach 5.5% of GDP in 2026 (5.0% in 2025), aided by revenue administration improvements. We expect the interest-to-revenue ratio to remain well above the ‘B’ median of 12.1%, despite higher revenue”.
Fitch estimates government debt was 51.0% of GDP at end-2025 and projects it will fall below 46% in 2026 on primary surpluses and strong nominal GDP growth, declining below the projected ‘B’ median from 2026.
External debt accounts for approximately 72% of total debt, exposing the trajectory to exchange-rate risk, although the kwanza is expected to remain broadly stable over the forecast horizon.
Angola improved its financing mix through a dual-tranche USD2.5 billion Eurobond in March 2026, alongside a partial buyback of the 2028 USD1.75 billion Eurobond.
With deepened multilateral support and other new external instruments, this diversifies away from a costlier, shorter-maturity domestic market, improving the debt profile. The use of total return swap instruments carries contingent liability risks, although transparency and terms have improved.
Presidential elections must be held by the end of August 2027, with President Lourenço constitutionally barred from a third term. The electoral landscape is increasingly competitive following the narrow 2022 result, and opposition parties have raised concerns about electoral integrity, increasing the risk of a contested outcome.
With the July 2025 fuel price protests highlighting the potential for social unrest, we see a heightened risk of pre-election slippage in social transfers and capex spending. Nonetheless, analysts expect broad policy continuity irrespective of the election outcome.
Real GDP growth is estimated at 3.1% in 2025, with non-oil growth more than offsetting the oil output contraction caused by unplanned maintenance shutdowns.
Fitch forecasts growth at 3.6% in 2026, supported by a rebound of oil and gas production from new fields coming on stream and continued non-oil expansion.
Oil output is expected to remain broadly stable through 2030, meaning medium-term growth will hinge on the pace and depth of diversification efforts.
Inflation was 12.4% as of March 2026, already below the Banco Nacional de Angola’s end-year target of 13.5% and well ahead of our previous forecast.
“We project inflation to reach around 10% by end-2026, underpinned by kwanza stability, a restrictive policy stance maintained through a cautious and gradual pace of further rate cuts, and fuel subsidies shielding consumers from oil price pass-through to retail prices”, Fitch said.
Ratings analysts said these factors are expected to more than offset rising import and transportation costs from higher global oil prices. Fitch Upgrades Ghana to ‘B’; Outlook Positive
