In a statement, the financial institution points out, among the reforms, the gradual removal of fossil fuel subsidies.
The loan, known by its English acronym DPL, "supports this agenda and provides financing to Angola to help mitigate the social impacts, at a time when the increase in gasoline prices by around 87 percent is causing temporary difficulties and a spike in inflation".
"This funding will help consolidate the government's reform agenda and provide much-needed budget support to reduce the short-term social costs of economic transition", according to Juan Carlos Alvarez, World Bank representative for Angola, quoted in the same document.
The World Bank underlines that Angola's significant dependence on the oil sector exposes the country to external shocks and harms the non-oil economy, in addition to the significant costs of subsidies (about 3.1 billion dollars in subsidies in 2022) that keep prices artificially low, preventing further investments in human and physical capital.
DPL funding supports Angola in three areas: measures to reduce economic distortions and strengthen the resilience of Angola's fiscal and financial sector, social inclusion and improving markets and infrastructure
According to the World Bank, the social protection program known as Kwenda (cash transfers to vulnerable families) helped to cushion economic shocks for more than 600,000 households in rural areas of Angola in May 2023, and it is expected that DPL-supported policies expand the program to 1.6 million households by 2025.
