Ver Angola


Consultant says election result influences end of fuel subsidies

The consultancy Eurasia considered that Angola is obliged to withdraw fuel subsidies from 2023, but warned that the elections will be decisive to see if the Government has enough political capital.


"The 2022 elections will influence the withdrawal of fuel subsidies in Angola", write the analysts, in a comment on the most recent events in several African countries.

In the note, sent to investors and to which Lusa had access, Eurasia writes that "the extension of the electoral cycle to 2023, with municipal elections, may influence the authorities' commitment to the World Bank to reduce subsidies in 2023" .

Reducing fuel subsidies has been repeatedly recommended by the International Monetary Fund (IMF) and the World Bank, which have listed it as one of the 12 conditions for the disbursement of the third tranche of the financial support program, which has a total value of 1, 7 billion dollars.

"The withdrawal of subsidies will be a difficult and politically costly initiative in an election year and in a context of high energy prices and high inflation", the analysts point out, concluding that "the results of the August elections will give an important signal about whether the authorities will have the political capital to withdraw the subsidies".

Angola has one of the lowest prices among the Southern African Development Community (SADC) countries due to fuel subsidies, on which it spends over US$1 billion annually.

In March, in a meeting with journalists, the Minister of Finance said that in addition to the social expenses that are no longer carried out, because of this subsidy, there is a problem of speculation and smuggling due to the significant difference between prices practiced in Angola and in other countries. neighbors.

"There are considerable amounts of fuel subsidized by Angolan taxpayers that are sold in neighboring countries," said the minister, according to a note then posted on the Ministry of Finance's website.

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