The 2025 government financing plan marks a decisive pivot toward duration: Treasury Bonds (Obrigacoes do Tesouro, OT) captured 56% of January-April domestic issuance, up from roughly equal billing with treasury bills a year earlier. With AOA 1.6 trillion placed in the first four months alone – a 33% year-on-year increase – the Ministry of Finance is systematically extending the maturity profile of Angola’s domestic debt stock, reducing the rollover pressure that has historically made fiscal planning vulnerable to short-term rate spikes.
The Two Core Instruments
Angola issues domestic bonds in two primary formats, each designed for a different investor mandate.
OTNR – Fixed-Rate Kwanza Bonds
Obrigacoes do Tesouro Nao Reajustaveis (OTNR) are conventional fixed-rate bonds denominated in kwanza. They pay a semi-annual coupon and redeem at par (Kz 1,000 nominal unit) at maturity. The Treasury offers OTNRs across a broad maturity spectrum:
| Maturity | Indicative Coupon (Early 2025) | Typical Investor Base |
|---|---|---|
| 2 years | ~20.0% | Banks, money-market funds |
| 3 years | ~20.5% | Insurance companies, pension funds |
| 5 years | ~21.0% | Pension funds, long-term institutional |
| 7 years | ~21.5% | Life insurers, development finance |
| 10 years | ~22.0% | Sovereign wealth, strategic buy-and-hold |
| 15 years | ~22.5% | Limited issuance, benchmark building |
| 20 years | ~23.0% | Rare; issued primarily for curve extension |
The steep slope between the 2-year (20%) and the 10-year (22%) reflects term premium compensation for inflation uncertainty and liquidity risk at longer tenors. Investors willing to lock in capital for a decade earn approximately 200 basis points above the short end – a spread that has compressed from over 400 bps in 2022 as confidence in macroeconomic stabilisation has grown.
OTX – Exchange-Rate-Indexed Bonds
Obrigacoes do Tesouro Indexadas (OTX) adjust the principal for movements in the USD/AOA exchange rate, effectively denominating the investor’s real exposure in dollars while settling in kwanza. OTX coupons are lower in nominal terms – typically 7-9% – because the indexation mechanism absorbs currency risk. For investors who are structurally bearish on the kwanza or who need to match USD-linked liabilities, OTX bonds provide a domestic alternative to holding Eurobonds. Further details on OTX mechanics are available on the OTX deep dive page.
Primary Issuance
Like treasury bills, OTs are placed through competitive auctions managed by the BNA. The Ministry of Finance publishes a quarterly issuance calendar specifying planned tenors and indicative volumes. Primary dealers submit coupon-rate bids, and the Treasury accepts bids from the lowest coupon upward until the target volume is filled. Bid-to-cover ratios on recent OTNR auctions have generally ranged from 1.2x to 2.5x, with the 5-year tenor attracting the strongest demand from domestic pension funds and insurance companies required by regulation to hold a minimum share of assets in government securities.
Auction results – including weighted-average coupons, marginal rates, and allotment volumes – are published on the BNA website and tracked in our Bond Auctions database.
Secondary Market and Liquidity
OTNRs trade on BODIVA’s secondary market, though liquidity is thinner than in the treasury bill segment. Average daily turnover for OTs is estimated at AOA 2-5 billion, concentrated in the 2- to 5-year maturities. Longer-dated bonds (10 years and above) trade infrequently on-exchange, with most institutional rebalancing occurring through bilateral negotiation settled via CEVAMA on T+2.
BODIVA has taken steps to improve secondary liquidity, including the introduction of market-making obligations for licensed dealers and the publication of indicative bid-offer spreads. These reforms are part of the broader capital-markets deepening agenda that also includes the equity market expansion through the PROPRIV privatisation programme.
Tax Treatment
Coupon income and capital gains on OTs are subject to the Capital Application Tax (Imposto de Aplicacao de Capitais, IAC) at 15%, withheld at source. This rate applies equally to resident and non-resident investors. Angola’s bilateral tax treaties – notably with Portugal, Brazil, South Africa, and the UAE – may provide for reduced withholding in specific cases, though investors should seek country-specific guidance. A comprehensive overview is available on the investment tax page.
The Duration Bet
The decision to overweight OTNRs versus OTXs, and to choose between maturities, is fundamentally a view on three variables: the trajectory of BNA monetary policy, the pace of kwanza depreciation, and the credibility of Angola’s fiscal consolidation.
If the BNA follows through on market expectations for rate cuts through 2025-2026 – plausible given that inflation has been trending toward the central bank’s medium-term target – investors holding 5- to 10-year OTNRs at current coupon levels will benefit from capital gains as secondary-market yields fall. A 200 bps decline in the 5-year yield, for example, would generate a price return of roughly 7-8% on top of the coupon.
Conversely, a resurgence in inflation – perhaps triggered by oil-price weakness and renewed fiscal slippage – would push yields higher and inflict mark-to-market losses on long-duration holders. The OTX alternative offers partial protection against this scenario, since kwanza depreciation would increase the indexed principal, but at the cost of a lower running yield.
For institutional allocators, the practical question is portfolio construction. Angolan pension funds (fundos de pensoes) are required by CMC regulation to hold a minimum percentage of assets in government securities, creating a captive demand base that supports OTNR pricing. Foreign investors, by contrast, face the additional layer of currency risk and should evaluate OT positions in conjunction with the FX outlook and available hedging instruments.