Angola plans a debt-for-health swap this year, the finance ministry said on Tuesday, part of a broader borrowing plan that also includes securing World Bank support and an international market bond sale.
Debt swap agreements, which focus on social or environmental benefits, are becoming an increasingly popular financing tool in developing parts of the world, having been used by the likes of Belize, Ecuador and Ivory Coast in recent years.
A debt-for-health swap would allow Angola to replace costly debt with lower-cost financing as long as it directs the resultant savings towards the health sector.
The Southern African oil exporter has been seeking to limit its debt in recent years, after a surge in borrowing including oil-backed loans from China, left it spending more than 40% of its budget on debt service this year.
The ministry’s annual borrowing plan, which was presented to the media by officials on Tuesday, said the key focus of debt policy was “minimising financing costs over the long term.”
Reuters/Shakirat Sadiq