Angola has found itself in the news again over its rising financial pressures, as a $200 million margin call from U.S. banking giant JPMorgan Chase & Co. has exposed the serious debt problems many African countries are currently facing. This call for payment came after the value of Angola’s government bonds – which were used as security for a $1 billion loan – dropped sharply on the global market.
The loan in question was part of a complex financial deal known as a Total Return Swap (TRS), agreed between Angola and JPMorgan in December 2024. Under the arrangement, Angola issued about $1.9 billion in dollar bonds. These bonds were then used to get a loan of $1 billion in two parts from the American bank. The idea behind this was to get cash without officially increasing the country’s debt figures. But when the bonds fell in value by March 2025 – mostly due to global market tension and new trade policies coming from the United States – JPMorgan demanded extra funds to balance the risk. The bond, which was worth 100 cents on the dollar when the deal was struck, fell as low as 86 cents, sparking the $200 million demand.
Angola’s Minister of Finance, Vera Daves de Sousa, quickly responded to the call. She confirmed that the government made the payment, saying, “We were ready to present the money. I think it’s a strong sign.” Her remarks were seen as an attempt to restore confidence in the country’s financial management. However, experts believe the situation highlights a dangerous trend in African finance – the growing use of complex loans and financial tools that may carry hidden risks.
According to analysts, including Samir Gadio, who heads African strategy at Standard Chartered Bank, these types of loans can become very risky. “The danger is that if the market turns suddenly, as we saw in this case, governments may be forced to find large amounts of money on short notice,” he said.
The use of off-book loans like TRS and other private arrangements has been growing across the continent. Countries such as Senegal, Gabon, and Cameroon have also turned to such methods to meet funding needs. With Africa’s total sovereign debt now over $1.8 trillion, many governments are finding it difficult to borrow the traditional way. As a result, they explore alternative deals, often without full public knowledge or proper long-term planning.
In Angola, the situation is made worse by the country’s heavy dependence on oil exports. With oil prices falling, government revenues have dropped. Budget data shows that since 2015, spending on social services like healthcare and education has dropped by 55%. Meanwhile, nearly 50% of the national budget is now going into paying back debt.
To help manage the growing pressure, Angola is reportedly in talks with the International Monetary Fund (IMF) for a new agreement. The aim is to stabilize the economy and provide financial support while the government looks for better solutions to its debt burden.
Observers say this is a wake-up call for African countries to focus on transparency, debt sustainability, and long-term fiscal discipline. While creative financing like the TRS may offer quick solutions, they can also bring bigger problems if not handled with caution. For Angola, the episode has shown the importance of better planning and economic reform as it navigates a difficult financial path in a volatile global environment.
