All three major credit rating agencies assign Angola a single-B category sovereign rating with stable outlooks – a consensus that prices the Republic as a speculative-grade borrower with meaningful credit risk but acknowledges the structural reforms and fiscal consolidation that have steadied the trajectory since the twin oil-price and COVID shocks of 2020. For investors holding or considering Angolan government bonds, these ratings shape everything from Eurobond spreads to the eligibility of domestic securities for institutional portfolios.
Current Ratings Snapshot
| Agency | Rating | Outlook | Last Action | Date |
|---|---|---|---|---|
| S&P Global Ratings | B- | Stable | Affirmed | 2024 |
| Moody’s Investors Service | B3 | Stable | Upgraded from Caa1 | 2023 |
| Fitch Ratings | B- | Stable | Affirmed | 2024 |
On the standardised scale, S&P’s B- and Fitch’s B- are equivalent, while Moody’s B3 maps to the same tier. The stable outlooks across all three agencies indicate that, barring a major external shock, the rating agencies expect Angola’s creditworthiness to remain broadly unchanged over the next 12 to 18 months.
Key Rating Drivers
Oil Dependency and Revenue Concentration
Angola remains one of the most oil-dependent economies rated by any of the three agencies. Crude oil and natural gas account for approximately 50-60% of government revenue and over 90% of export earnings, according to IMF Article IV data. This concentration means that a sustained decline in Brent crude prices – below the fiscal breakeven estimated at roughly USD 60-65 per barrel – would rapidly deteriorate the fiscal position. Rating agencies consistently cite this single-commodity vulnerability as the primary constraint on upward rating movement.
Fiscal Consolidation Progress
The government has made measurable progress on fiscal discipline. Debt-to-GDP, which peaked above 120% in 2020 when oil prices collapsed and the kwanza depreciated sharply, has declined to an estimated 65-70% range as of late 2025, aided by higher oil revenues, currency stabilisation, and primary surpluses in several recent fiscal years. The IMF’s Extended Fund Facility programme, completed in 2023, embedded structural benchmarks – including public financial management reform and subsidy rationalisation – that the rating agencies view positively.
Monetary Policy and Inflation
The Banco Nacional de Angola (BNA) has executed a disciplined tightening-then-easing cycle. After raising the benchmark rate (taxa basica) to 19.5% to combat inflation, the BNA began an easing cycle cutting to the current 17.5%, responding to inflation that has decelerated to approximately 15.7% year-on-year. This credible monetary framework strengthens the rating case, as agencies reward central bank independence and evidence of effective transmission from policy rates to consumer prices. For a deeper analysis of the rate trajectory, see the BNA monetary policy tracker.
Governance and Institutional Quality
All three agencies note ongoing weaknesses in governance indicators, including transparency of public finances, anti-corruption enforcement, and the business environment. Angola ranks in the lower quartile on the World Bank’s Governance Indicators across most dimensions. Improvement here represents the most plausible path to a rating upgrade, as it would signal reduced event risk and improved policy predictability.
External Liquidity and Reserves
Gross international reserves stood at approximately USD 14-15 billion in late 2025, providing roughly five months of import cover. The managed float of the kwanza, with the parallel-market premium compressed to around 9%, has eased capital-account pressures. Angola’s bilateral and multilateral credit lines – including facilities with China, the African Development Bank, and the World Bank – provide additional buffers that support the stable outlook.
Rating History and Trajectory
Angola’s rating history reflects the boom-bust cycle of oil-dependent economies:
- 2010-2014 – Upgrade cycle. S&P moved Angola to BB- in 2012, reflecting the post-civil-war reconstruction boom and sustained high oil prices. Moody’s assigned Ba3 in the same period. This was the peak rating for the Republic.
- 2015-2016 – Oil price crash. Brent fell below USD 30 per barrel. All three agencies initiated downgrades, with S&P moving to B and Moody’s to B2. Fiscal deficits widened sharply, and the kwanza peg came under severe pressure.
- 2017-2019 – President Lourenco reform era begins. Initial optimism met continued macro stress. Ratings stabilised in the B/B3 range but did not recover to pre-crisis levels, as debt-to-GDP ratios climbed and the kwanza underwent a managed devaluation of over 50%.
- 2020 – COVID and second oil crash. Moody’s downgraded Angola to Caa1 (deep speculative grade) as GDP contracted over 5% and debt-to-GDP spiked above 120%. S&P and Fitch held at B- but shifted outlooks to negative.
- 2021-2023 – Recovery. Rising oil prices, fiscal consolidation under the IMF programme, and kwanza stabilisation drove outlook revisions back to stable. Moody’s upgraded from Caa1 to B3 in 2023, the most significant positive action in the cycle.
- 2024-present – Stable plateau. All three agencies have affirmed current ratings with stable outlooks, reflecting a balanced assessment of progress and persistent vulnerabilities.
Peer Comparison
Angola’s B-/B3 rating sits in the middle of the Sub-Saharan African sovereign spectrum. Context matters:
| Country | S&P | Moody’s | Fitch | Key Differentiator |
|---|---|---|---|---|
| Nigeria | B- | B3 | B- | Similar oil dependency, larger more diversified economy |
| Mozambique | CCC+ | Caa2 | CCC+ | Hidden-debt legacy, LNG upside not yet rated |
| Zambia | – | – | RD/CCC | Post-default restructuring; restored rating pending |
| Kenya | B | B3 | B | More diversified economy, higher debt service burden |
| Cameroon | B- | B2 | B | CEMAC membership, lower oil concentration |
| Gabon | – | Caa1 | B- | Smaller economy, similar resource dependency |
Angola rates in line with Nigeria – a notable benchmark since Nigeria has a substantially larger and more diversified economy but faces its own currency and fiscal challenges. The gap with investment-grade African sovereigns like Botswana (A-/A3) and Mauritius (Baa3) remains wide and would require several years of sustained reform and diversification to close.
What Ratings Mean for Bond Investors
Eurobond Pricing
Angola’s Eurobond spreads trade directly off the sovereign rating. The approximately USD 8 billion in outstanding international bonds price at spreads of 500-800 basis points over US Treasuries, reflecting the B-/B3 credit tier plus Angola-specific risk premium. A one-notch upgrade to B/B2 could compress spreads by 50-100 bps, generating meaningful capital gains for existing holders.
Domestic Bond Eligibility
Many institutional investors – particularly European and Asian asset managers, insurance companies, and pension funds – have minimum-rating thresholds for portfolio inclusion. At B-/B3, Angolan sovereign debt falls within the mandate of dedicated frontier-market and high-yield funds but remains excluded from investment-grade benchmarks. An upgrade path toward BB- territory would unlock a significantly larger pool of institutional capital.
Index Inclusion
Angola’s domestic bonds are not currently included in major local-currency bond indices such as the J.P. Morgan GBI-EM. Inclusion would require improvements in market accessibility, liquidity, and settlement infrastructure in addition to credit quality – but the rating is one necessary condition.
Risk Assessment Framework
For investors building positions in Angolan treasury bills or treasury bonds, the rating provides an anchor for scenario analysis. At a B- level, the implied cumulative five-year default probability from historical data is approximately 15-20%, meaning that while current service is expected, the tail risk of restructuring or reprofiling is non-trivial and must be priced into return expectations.
Outlook: What Would Trigger a Change?
Upgrade catalysts: Sustained fiscal surpluses leading to debt-to-GDP below 60%; meaningful economic diversification reducing oil revenue concentration below 40% of total; continued decline in inflation toward single digits; improvements in governance metrics and business-environment rankings.
Downgrade triggers: Oil price collapse below USD 45-50 sustained for more than two quarters; loss of fiscal discipline leading to primary deficits and rising debt ratios; sharp kwanza depreciation exceeding 30% in a single year; political instability or reversal of reform commitments; external financing stress leading to arrears on commercial debt.
The stable outlook across all three agencies suggests that, absent a significant oil-price shock, Angola’s credit profile is likely to remain in the current range through 2026-2027. The most probable path to an upgrade runs through continued fiscal consolidation, successful PROPRIV privatisations, and evidence that non-oil revenue growth is structurally accelerating.