Angola seeks AfDB support as oil cushions impact of global shocks

Angola is seeking fresh support from the African Development Bank as it works to steady its finances in a volatile global environment, even as stronger oil prices offer some relief. 

The government is in talks for a $165 million budget support loan, part of a wider plan to raise about $1 billion from external sources this year.

Officials say the funding will help cushion vulnerable households from the effects of the Middle East conflict while keeping spending on track. 

Finance Minister Vera Daves de Sousa said discussions are ongoing and tied to reforms Angola must complete before the loan can go to the bank’s board. She did not give a timeline for approval. 

The talks come as several African economies juggle rising borrowing costs and pressure to maintain social spending.

Angola is also considering bilateral loans and a possible return to international markets to close its financing gap. 

Higher crude prices are helping. The 2026 budget was based on $61 per barrel, but Brent crude is trading close to $100, giving the government more room to manage near-term pressures.

Debt pressures remain 

Debt servicing continues to weigh heavily on public finances, taking up nearly half of Angola’s initial 2026 budget.

That has pushed authorities to look for ways to lower borrowing costs and improve how public funds are used. 

The government is not seeking a lending program with the International Monetary Fund for now.

Instead, it is working with the Fund on technical support to improve tax collection, review spending and guide reforms.

Support from global lenders 

Angola is also receiving backing from the World Bank, which approved a guarantee for a debt-for-education swap to help finance new schools.

Officials expect the arrangement to be completed by midyear. 

So far, the country has secured $2.9 billion of the $3.8 billion it plans to raise externally in 2026.

The final amount could change depending on revenue, particularly if oil prices remain firm.

Growth outlook steady 

Economic growth is expected to hold near 4%, supported by oil output even as other sectors face pressure from global uncertainty. 

Daves de Sousa said the government is reviewing how best to use additional oil revenue to support essential services, while continuing a gradual reduction of fuel subsidies as part of broader fiscal reforms.