“It is imperative that the State refrains from engaging in financing backed by commodity collateral, in order to allow freer and more competitive financing of the entire extractive industry,” reads Presidential Decree 52/24, which outlines the Medium-Term Debt Plan 2024–2026. This debt repayment mechanism has been labeled as part of the “demonization of Africa’s debt to China,” due to its negative impact on developing economies. However, according to Expansão, Beijing has expressed openness to whatever “method” Luanda deems best.
The Asian giant, through Yu Yong, one of the three deputy directors general at the Ministry of Foreign Affairs, emphasized that Angola’s debt repayment to China with oil as collateral was Angola’s decision — under the government of José Eduardo dos Santos — and not China’s. This statement is included in an article by Expansão titled “Debt with Oil as Collateral Was Angola’s Proposal.”
It is worth noting that the practice of repaying debt with oil collateral has increasingly drawn criticism from African debtor nations and Western countries alike.
The model has even been dubbed the “demonization of African debt to China,” a perspective that reflects the widespread rejection of this approach. The government of João Lourenço, for example, has made it clear that it no longer wishes to enter into such debt agreements.
This stance is expressed in the Debt Strategy 2024–2026 and in Presidential Decree 52/24. Published in the Diário da República, the decree states that the government intends to forgo loans collateralized with commodities and instead seeks to secure external financing with a minimum repayment period of 15 to 20 years, along with a 60-month grace period.
“It is imperative that the State refrains from engaging in financing backed by commodity collateral, in order to allow freer and more competitive financing of the entire extractive industry,” the document states.
The complexity of Angola’s debt to China extends beyond its borders, as several African nations are indebted to the Asian giant, and the repayment mechanism is under scrutiny. In Angola’s case, the debt predates the 2013 Belt and Road Initiative, beginning after the end of the Civil War in 2002, when China became the main financier of the country’s post-war reconstruction. The debt has since been repaid through this now-criticized model.
As of 2024, according to official data from the National Bank of Angola (BNA), Angola’s public debt to China stood at $18.4 billion, accounting for 37% of the country’s total debt. Data from CEDESA shows that this figure decreased from $22.4 billion in 2019 to $18.4 billion in 2023.
Some entities have proposed that African countries indebted to China negotiate collectively — under the African Union — rather than individually.
Source: Correio da Kianda
