In an interview in Washington on Friday, during the spring meetings of the International Monetary Fund (IMF) and the World Bank, Vera Daves explained that Angola’s decision to continue withdrawing fuel subsidies is expected to result in significant savings.
In Angola, fuel is subsidized by the government, which has decided to gradually phase out this support since 2023, following IMF recommendations.
Concerning measures to mitigate the effects of subsidy removal on the economy and Angolan families, the minister indicated the continuation of existing plans, including another cycle of the Kwenda program. This program supports families in poverty or vulnerability with the technical and financial assistance of the World Bank, or more support for financing business initiatives geared towards food security.
Regarding the pace of subsidy withdrawal, the minister stated it would depend on the activation of the new cycle of Kwenda, the availability of financial resources and instruments to support companies, and inflation trends influenced by the monetary policy of the National Bank of Angola.
“The pace of reform must necessarily be in close dialogue with the National Bank of Angola due to the inflation impact. […] However, it is a path we must follow because significant savings are expected from this removal,” the minister emphasized.
In the interview, Vera Daves also mentioned the possibility of amending the General State Budget based on fuel price developments.
“We have scenarios under analysis: a price of 65 dollars (57 euros) per barrel, a price of 55 dollars (48 euros), a price of 45 dollars (39.4 euros). We understand that up to 55 dollars per barrel, […] it is still possible to manage the situation, and we intend to do so. Continually, prices below 55 dollars [per barrel] may likely require a budget revision,” she assessed.
“We will observe. We have run the numbers and prepared all figures. As long as we can manage the situation only with expenditure sequestrations on goods and services and capital expenses, we will manage it this way. If we find it insufficient, because the price stays too long below this sustainable level, we would then proceed with the budget revision exercise,” she added.
