The government of Angola should begin preparing the renegotiation of public debt with domestic and foreign creditors due to the fall in the price of oil on the international markets, said an Angolan economist quoted by the Jornal de Angola newspaper.
Economist Precioso Domingos, professor at the Catholic University of Angola, told the newspaper that although this is not the best time to carry out such a renegotiation, given that given the low oil prices the margin for negotiation is reduced, “there will not be many options, because oil is the main bartering tool.”
Since Monday the price of a barrel of Brent oil, which is the benchmark for the oil exported by Angola, has been around US$30, and is currently being traded at around US$28.
Estimates from international agencies at the beginning of the year pointed to price stability at around US$55 per barrel, and this is also the reference price adopted by the Angolan government to draft the General State Budget for 2020.
The epidemic of coronavirus, COVID-19, has been added to disagreements between Russia and Saudi Arabia about possible cuts in provision of countries and opened the way to an oil price crisis.
The latest estimates indicate that 700 million fewer barrels per day will be produced, and that this drop in production will not be enough to drive prices upwards, as demand has also fallen significantly due to a number of economies being at a standstill.
Angola’s Finance Minister, Vera Daves, said at the beginning of the month it was still, “too soon to consider any scenario to revise the State Budget for 2020,” despite the volatility of the price of oil extracted in the country on the international markets.