ALMA Reps Email Circular: 18 April 2008

Angola Debt Fact sheet

• Total external debt: $11.5 billion (World Bank, 2005)
• Total external debt payments: Gives $2.2 billion each year to the rich world in debt payments (World  Bank, 2005)
• Population: 15.9 million (World Bank, 2005)
• Percentage of adults who can read and write: 32.6 % (UN HDR, 2005)
• Average life expectancy: 41.7 years (UN HDR, 2005)
• HIV prevalence: 3.7% (UN HDR, 2005)
• Total health spending: 1.5% of GDP (UN HDR, 2005)
• Total spending on debt service payments: 6.8% of GDP (UN HDR, 2005)
• Annual GDP: $32.8 billion (UN HDR, 2005)

History of Angola

Angola was a former Portuguese colony, and the Carnation Revolution, a coup d’état in Portugal on 25 April 1974, paved the way for Angolan independence which it won on 11 November 1975. Angola is a nation rich in natural resources, it is Africa’s second largest oil producer and also has a wealth of diamonds, iron ore and coffee.  These natural resources should mean that Angola is economically rich, yet this is not the case due to its troubled history and huge accumulation of foreign debts that have resulted from this.

Much of Angola’s past has been blighted by long periods of war. The War for Independence was fought between 1961-1975, followed immediately by civil war. which lasted from 1975 to 2002. The civil war was fought between UNITA (The National Union for the total Independence of Angola) and the MPLA (Popular Movement for the Liberation of Angola) the two opposing parties in Angola.  UNITA received much of its military aid from China, as well as USA and South Africa later on, while the MPLA received much of their support from the former Soviet Union.

Where has the debt come from?

Angola’s debt comes principally from money owned to the former Soviet Union for arms purchases during the Cold War.  Angola took out many loans during the civil war, primarily to finance the war and to purchase arms and weapons. It also received expensive oil-guaranteed loans to help it fight the civil war. Most of the revenue that was generated by these loans was used by the government to fight the UNITA rebels, and once the war had ended, to help it rebuild its economy and infrastructure. Most of the oil guaranteed arrangements were made with Brazil, Portugal and Spain. By 2004 the combined impact of 30 years of war and post-conflict reconstruction has resulted in a massive build up of debt.

Debt cancellation status

Angola is officially classed as a lower middle-income country by the World Bank. It is therefore not eligible for the Heavily Indebted Poor Countries initiative or the Multilateral Debt Relief Initiative . Nor is it eligible for additional debt relief from the UK or other bilateral donors.

The New Economics Foundation calculates that Angola requires 59% debt cancellation in order for the government to meet the basic needs of its citizens, such as health, education and infrastructure, without taxing those living below an ethical poverty line of $3 a day.

Further information:

Jubilee Usa factsheet on Angola and its debt ( 58K)
Worldbank country brief for Angola

General information:

BBC country profile for Angola
New Internationalist country profile for Angola