UPDATE 1-Angola says debt to building firms at $9 bln

* Finance Ministry says $9 bln owed to construction firms

* Says has paid $1 bln so far

* Says will be more transparent in spending

* Higher debt means Angola unlikely to issue bond-analysts

(Recasts with details, analyst)

By Henrique Almeida

LUANDA, July 20 (Reuters) - Angola owes foreign building firms $9 billion, the Finance Ministry said, a higher figure than Angolan President Jose Eduardo dos Santos gave the previous day and one that could hamper its plans for a $4 billion bond.

President dos Santos said on Monday the country owed $6.8 billion to the mostly Portuguese and Brazilian companies, incurred after the sharp drop in oil prices in 2008 and 2009 left oil-dependent Angola with little money to pay foreign firms.

However, the Finance Ministry said on Tuesday this figure was $9 billion.

"This debt is estimated at $9 billion. The Angolan government intends to pay in full these arrears," the ministry said in a statement published in state-run daily Jornal de Angola.

Analysts said the announcement brings into question the government's plans to issue up to $4 billion in foreign sovereign bonds this year as a higher risk of default increases the premium it needs to pay investors.

"I think its hard to issue bonds given the unexpected level of debt in Angola. If the country decides to issue bonds it will have to pay a much higher level of interest," Ricardo Gazel, a World Bank economist, said in Luanda.

Angola, which global ratings agencies gave a debut rating of B+ for foreign debt in May, has said it would decide whether to issue the bonds after it reviewed the 2010 budget this month. [ID:nLDE64I10G]

President Dos Santos said Angola planned to pay small and medium-sized building firms in full in about two months, while big building firms would receive 40 percent of what they are owed demands this year and the rest in one or two years time.

Angola had paid 1 billion to building firms in late payments dating back to 2008 and 2009, according to the ministry. This has left many construction companies struggling to make ends meet in the African nation.

CONSTRUCTION STRUGGLES

A group of Portuguese companies, including Mota Engil (MOTA.LS), Soares da Costa (SCOAE.LS) and Teixeira Duarte TDU.LS, complained in May they had not yet been paid for their work and urged the government to honour its debts.

Brazil's Odebrecht, the biggest builder in Angola, has halved its 27,000-strong workforce, according to the country's largest union CGSILA. Camargo Correia, another Brazilian firm, is reported to have abandoned its operations in the country.

Carlos Panzo, who is the government's spokesman on all financial matters, was not immediately available for comment.

The Finance Ministry said in the statement the Angolan government had "decided on imposing more rigour and transparency in budget spending" in the future and vowed to crack down on corrupt government officials.

Angola rivals Nigeria as Africa's biggest oil producer and depends on oil revenues for over 90 percent of its foreign exchange reserves. (Reporting by Henrique Almeida; editing by Karen Foster)