Ver Angola

Energy

End of fuel subsidies adds problems to existing ones, say analysts

Incompetence and fear of losing the August 2022 elections are the main reasons identified by analysts, heard by Lusa, to explain the imbroglio the authorities got into when they stopped subsidizing fuel.

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The reaction to the government decision, defended for many years by the International Monetary Fund (IMF), has a set date: activists and members of Angolan civil society have called a national demonstration for June 17 to protest against the rise in fuel prices, the end of street vendors and the proposed law on non-governmental organizations.

The issues, above all the increase in gasoline prices due to the partial withdrawal of fuel subsidies, have sparked, in recent days, protests and clashes with the police in several provinces, which resulted in at least five deaths and dozens of injuries and arrests.

"This is incompetence. This is not the way to govern", said to Lusa Cláudio Silva, an Angolan analyst who accuses the political power of not having considered the "enormous weariness of the Angolan population and the enormous pressure to which it is subject with the rise in prices, with rising inflation, with social problems, with the very low popularity of the President and the party".

"It was completely predictable," he defended.

The decision of the President, João Lourenço, to stop subsidizing fuel meant that from one day to the next, since the 2nd, a liter of gasoline in Angola started to cost 300 kwanzas against the previous 160 kwanzas.

Cláudio Silva added that the party in power since the country's independence in 1975, the Popular Movement for the Liberation of Angola (MPLA), feared the effects of the end of state subsidies in the 2022 elections.

"The problem, unfortunately, was that for various political reasons, mainly elections, the MPLA did not see itself as having social capital nor did it see itself as competent enough to eliminate subsidies in a phased manner. It doesn't make any kind of sense, it was afraid. Afraid, yes. They feared", he considered.

For Vasco Martins, from the Center for Social Studies at the University of Coimbra, "the lack of sensitivity in the Angolan executive" is nothing new.

"The State's communication with the population is too fragile and the overwhelming majority of the population does not have access to communications or else does not trust what comes from the Angolan Government, which is also a communication problem. That is, the measures are put into practice, sometimes with little notice", he highlighted.

The researcher noted that "the Angolan economy is a deeply extractive economy, namely oil, but also some precious stones and other types of materials, but above all raw materials".

"Which means that the overwhelming majority of the Angolan population is completely isolated economically and the only way to have some kind of survival, not even talking about social mobility, is in fact to enter what we commonly call the parallel market. Therefore, an informal, unofficial market", he explained.

"[Former Angolan president] José Eduardo dos Santos had already said that there is no Angolan who lives solely and exclusively on his salary", recalled Vasco Martins, which leads to "the idea that the petty corruption and informality that reigns in the country is politically acceptable".

These two factors give rise to the idea that there is a very extractive income economy and then an informal market, "where there is import and export of goods and how all goods are imported into Angola and are often sold informally - because Angola does not produce them - it means that Angola's dependence on communication in terms of the market is very clearly road", he reinforced.

"And therefore, [the] communication of transacting goods, of selling is total, which means that any increase in fuel will have an absurd, absurd impact on what people's economy is in their day-to-day lives", he added.

Cláudio Silva also argues that subsidies always ended up benefiting the wealthier class more.

"Because it's the one with the biggest cars, with the most fuel capacity. It's a middle, upper middle class that doesn't necessarily feel the effects of continuing to spend several million dollars a year on this subsidy to the detriment of other priorities. much more important, such as, for example, health, education", he underlined.

The same idea is defended by Vasco Martins, who related the importance of fuel to the majority of the Angolan population, "very poor, who work mainly in the transport sector, especially in the informal sectors".

"A substantial part of these people are, moreover, people who were reintegrated after the war but don't have, didn't have access to education. Therefore, one of the few things they manage to do is in fact this transport service", he explained.

"Many do not have a license, many do not have a citizen's card or do not have any registration of their vehicles, which means that, first, accessibility and fragility in relation to any type of official measure that is put into practice by the police and, therefore, which is investigated by the police, is already big for these people, they are left without the ability to make their economy count. Secondly, because precisely, it is always in the transport sector", he said.

The researcher regretted that, "normally, when there are this type of more harmful policies in the transport sectors, there is always a tendency to more violence".

"Unfortunately, it is precisely the action of the security forces that many times also have historically for a long time, since independence, a perhaps frivolous form of use of violence, which generates more and more violence", he stressed.

For the Angolan analyst Albino Pakasi, "there is an issue here" that must be taken into account: "The people are dissatisfied".

"My understanding is that there will be no 'Arab Spring' here. There will not be that because the Angolan people know what war is. What there is is a lack of competence on the part of the Government. Yes, we are a country that exports oil, but in fact we don't enjoy what oil is, right? We pay everything. The people. The people pay. It can't be like that", he reinforced.

"I don't want to be dramatic but [the situation] is a little complicated. It's very heavy. I don't want to diagnose the future, but the future is a little difficult here in Angola. The future is heavy. It's serious and very serious, because really Angola is not as it should be", concluded Pakasi.

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