The 32% tariffs imposed on Angolan exports to the U.S. may not have a direct impact on Angola’s economy, but the global fallout is deeply worrying. The Angolan government has already notified the U.S. of its intent to negotiate an exception, similar to what dozens of other countries are doing.
The announcement of the new U.S. import tariffs hit financial markets like a bombshell, dragging the global economy toward a potential recession — a blow particularly painful for developing countries reliant on commodity exports. Angola is one of those countries, now facing a sharp drop in crude oil prices on international markets, while remaining heavily dependent on external financing to cover debt repayments and implement the 2025 state budget.
Main Consequence for Angola: Oil Price Plunge
The biggest immediate impact is the decline in oil prices, driven by the rising likelihood of a global recession and the resulting drop in demand. While it’s still too early to predict how prices will behave over the course of the year, on Wednesday the price of a barrel of crude was hovering around $60 — $10 below the $70 baseline used in Angola’s 2025 state budget (OGE).
According to the OGE’s budget rationale, for every $5 decrease in the price of oil, the fiscal deficit doubles: from the already projected 1.65% of GDP (1.5 trillion Kz) to 3.3% (3.0 trillion Kz) if the price holds at $65. The deeper consequences of this global uncertainty could prove even more severe for Angola.
To bridge the deficit, Angola will likely need to borrow even more or drastically cut spending. But with 49% of this year’s budget already allocated to debt servicing, there’s little room to cut without addressing the so-called “fat” in the state apparatus — a measure the government has often promised but been slow to implement.
Budget Under Strain
Of the 34.6 trillion Kz projected in revenue for the 2025 budget, about 42% (roughly 14.6 trillion Kz) is expected to come from loans — 7.5 trillion Kz internally and 7.1 trillion externally. But with the global investment climate clouded by uncertainty, securing sustainable external financing will be difficult.
Angola’s sovereign bond yields — a measure of how much interest investors demand to lend money — rose from 11.3% before the tariff announcement to over 14% this week. This surge raises concerns that Angola, like other African oil-exporting countries, may once again be locked out of international debt markets as investors flee riskier assets amid the tariff war.
Finance Minister Vera Daves de Sousa recently announced Angola’s intent to issue $3 billion in eurobonds this year to help fund the budget — but this plan now appears in jeopardy.
“We Must Hit Pause,” Says Economist
According to economist Heitor Carvalho, director of the Economic Research Center at Lusíada University (CINVESTEC), the eurobond issuance process should be halted for now. While it’s too early to fully assess the impact of the U.S. tariffs on the global economy — since countermeasures may still follow — he warns that, “even if things return to normal, the effects of what has already happened will be brutal.”
Countries like Angola, he argues, will suffer severe consequences due to falling oil prices and demand.
As such, Carvalho urges early preparation for a revision of the state budget.
“It will drastically affect the entire economy. We must revise the budget. I suggest initial preparations begin now, and within 2–3 weeks, once the situation becomes clearer, the revision process should start,” he emphasized.
He also warns that the 32% tariff on Angolan exports to the U.S., along with rising global prices, will likely deter investment in Angola — damaging not only economic diversification efforts but also plans to increase oil production.
In times of uncertainty, investors retreat to safe-haven assets, like gold, which is currently on the rise.
Source: Expansão
