Africa-Press – Angola. The government of João Lourenço postponed the end of state subsidies for fuel until 2028, when the Executive that wins the 2027 general elections is already in office, according to the statement from the International Monetary Fund (IMF) on the assessment that the technical team made of Angola within the scope of the post-financing program, to which Expansão had access.
“Given the decline in oil revenues, the IMF directors highlighted the need to rationalize spending to preserve fiscal space and contain debt. Noting the postponement to 2028, they emphasized the importance of advancing fuel subsidy reform, accompanied by measures to protect the most vulnerable and a strong communications strategy,” the statement said, which did not clarify whether this meant the end of the fuel subsidy removal process or whether the gradual process would last until 2028.
However, according to Expansão’s findings, the gradual reduction of subsidies remains in place, albeit more spaced out over time. This is despite the government’s commitment to the IMF in February, as part of the multilateral institution’s regular visits to its member countries under Article IV of its statutes, to complete this process by the end of this year.
The removal of these subsidies has always been advocated by both the IMF and the World Bank, as they consider them harmful to the economy, as they consume public resources that could be used in areas such as health and education, and because they primarily benefit the richest, and because they discourage energy efficiency and the creation of sustainable alternatives.
This year, electricity bills rose by about 50% for most families, and water bills by 30%—both continue to be heavily subsidized by the state despite the increases—and the price of diesel increased twice, to 400 kwanzas per liter, leading to higher fares on urban public transportation. Taxis (commonly known as “candongueiros”) now cost 300 kwanzas per ride, up from 200 kwanzas previously, while bus fares, which previously cost 150 kwanzas, rose to 200 kwanzas.
According to a World Bank projection, the two diesel price hikes have pushed 94,200 Angolans into poverty. And this number could even increase in the coming months, if the document regarding the largest financing planned by the World Bank for Angola this year (USD 750 million of a total of USD 1.355 billion) is confirmed, and is expected to be approved in November. This is because one of the reforms required by the World Bank to release funds is precisely the continuation of the process of removing fuel subsidies.
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