Angola could raise up to $1bn from its debut Eurobond, which will be issued by the end of 2013, the government announced in late February. The announcement followed the government’s new 2013 budget, which will significantly boost public spending in order to rebuild Angola’s infrastructure and improve social conditions across the country. Although it is unclear how the planned issue will be used, the Eurobond will be part of Angola’s national debt and it is expected that the revenues will cover the cost of its new budget.
The oil-rich economy, which is Africa’s second biggest oil producer, has twice delayed issuing international bonds. Falling oil prices in 2009 dented the government’s budget and ground plans for a $4bn issue to a halt, and a $500m issue planned for 2011 was also abandoned. This announcement is a sign that the government is seeking to emulate the success of its neighbour Zambia, which made its Eurobond debut in September 2012, with a $750m issue that was 15 times oversubscribed.
Angola’s booming oil sector has enabled it to become one of the world’s fastest-growing economies. Between 2001 and 2010 the country's economy grew at an average annual rate of 11%. Providing that international demand for the country’s oil does not decline, the government expects the country's economy to grow by 7.1% this year.
Despite this, Angola's FDI record has been turbulent in recent years. Greenfield investment monitor fDi Markets found that greenfield projects peaked in 2009 with 54 projects worth $5.5bn, before declining to 37 projects in 2011 worth $311m. Although capital expenditure increased in 2012, as total investments in the year's 28 projects were worth $3bn, it remains to be seen whether Angola’s Eurobond will receive the same level of interest as Zambia’s.