Angola expects to finalize a debt-for-development swap with the World Bank by June 2025, marking a key milestone in its strategy to ease debt pressure while channeling funds toward critical social sectors such as health and education, according to Ottoniel dos Santos, the country’s Secretary of State for Finance and Treasury. Speaking on the sidelines of the IMF–World Bank Annual Meetings in Washington, dos Santos said negotiations were progressing steadily and that the swap would help redirect financial resources toward development priorities.

“We are working with the World Bank on a debt-for-development swap, which will diminish the burden of our debt and also enable us to focus on specific areas like health and education,” he told Reuters.

Debt Swaps as Tools for Development and Resilience

Debt-for-development and debt-for-nature swaps which exchange sovereign debt relief for domestic investments in social or environmental programs have gained traction among emerging economies seeking fiscal space amid tighter global financial conditions. The IMF’s latest Sub-Saharan Africa Regional Economic Outlook, released earlier this week, noted that such swaps could unlock new investment in education, healthcare, climate adaptation, and biodiversity, though they still account for less than $1 billion annually worldwide. Recent examples include Ivory Coast’s education-focused debt swap and Gabon’s $500 million debt-for-nature deal, both of which attracted multilateral backing. Angola’s initiative, while still under negotiation, is expected to follow a similar model linking debt relief to measurable development outcomes.

Fiscal Stability Amid Financing Pressures

The debt swap discussions come as Angola manages a complex financing environment. Earlier this month, Luanda issued a $1.75 billion eurobond part of its $6 billion plan to meet $14.9 billion in total funding needs for 2025, according to a finance ministry report. The country faces a $864 million eurobond repayment due in November 2025, along with a $1 billion total return swap with JPMorgan that matures in December. Dos Santos confirmed that the government is assessing whether to roll over the JPMorgan facility, adding:

“We are actually working with JPMorgan, but we have not decided yet.”

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Despite these near-term obligations, Angola’s debt profile has strengthened considerably in recent years. The country’s debt-to-GDP ratio has fallen from over 100% in 2020 following the twin shocks of the pandemic and oil price collapse to around 55% today, reflecting improved fiscal discipline and stronger oil revenues.

Exploring New Capital Markets

To diversify its financing sources, Angola is also exploring alternative instruments such as Panda bonds (yuan-denominated, issued in China), Samurai bonds (yen-denominated, issued in Japan), and Sukuk bonds (Islamic finance-compliant debt). Dos Santos said these options could attract investors from Asia and the Middle East who are less familiar with Angola’s credit story.

“We now have enough expertise and confidence to be daring to tell the Angola story,” he said.

Analysts view these instruments as part of Luanda’s broader effort to reduce reliance on Western markets while expanding access to more diversified pools of capital for development financing.

Balancing Reform and Independence

Although Angola continues to maintain close engagement with the International Monetary Fund, dos Santos emphasized that no new financial program is being considered at present.

“We are very comfortable with the relation and the support,” he noted. “But we don’t have anything on the table regarding a program.”

Angola completed its last IMF Extended Fund Facility (EFF) in 2021, which helped stabilize public finances and restore investor confidence. The forthcoming debt-for-development swap signals a strategic pivot from crisis stabilization toward long-term social investment and sustainable debt management.

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A Step Toward Sustainable Growth

If completed, the World Bank–Angola debt swap could mark one of the largest development-linked debt restructuring initiatives in Africa this year, setting a precedent for other resource-dependent economies seeking to balance debt reduction with social and climate priorities. With debt levels declining, new financing channels emerging, and social investments at the center of fiscal reform, Luanda appears determined to reshape its financial narrative from managing debt burdens to leveraging capital for inclusive, sustainable growth.

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