Luanda, Aug. 28, 2025 (Lusa) - A senior economist at the World Bank (WB) stated on Thursday that the removal of fuel subsidies in Angola should be implemented in a more consistent, inclusive, and sustainable manner that can effectively mitigate social impacts.
"The issue of removing [fuel] subsidies is not that it's bad at all, but it's the way it's being done, perhaps. We've been working with the Debt Management Unit and the Ministry of Finance to ensure that the removal is done in a way that also mitigates the social impacts," said Nelson Eduardo, senior economist at the WB's Global Economic Policy Department.
Eduardo, who was speaking today during a panel at the Angola Economic Forum (AEF2025), which runs until Friday in Luanda, also recommended that the Angolan authorities not only remove state subsidies, "but also compensate those who should in fact be compensated".
Nelson Eduardo also praised the Kwenda Project (a programme of cash transfers to the most vulnerable in Angola), while lamenting the "discontinuation" of social passes for students on public transport.
The senior economist, who was one of the speakers on the panel that dealt with "Economic growth, public investment and public debt: challenges and opportunities", also considered that the removal of fuel subsidies "is difficult, but it is an inevitable path" for Angola.
He said that the issue of removing subsidies should be accompanied by effective communication [to citizens] capable of clarifying the advantages and disadvantages of removing the subsidy, with the aim of "attracting more social support for this measure".
"It's an inevitable path, but it should be done more consistently and inclusively," he noted, emphasising that the World Bank advocates a "sustainable removal".
The Angolan government expects to save around 400 billion kwanzas a year (approximately €372 million) by removing fuel subsidies, redirecting resources to sectors such as health, education, and infrastructure.
Since July 4, the price of a litre of diesel in Angola has increased from 300 kwanzas (€ 0.28) to 400 kwanzas (€ 0.37), a measure that has led to increases in public and private transport and sparked protests.
According to Nelson Eduardo, it makes no sense for Angola to spend around two to three billion dollars a year subsidising fuel, when it has so many basic needs to meet.
"Spending 3% of the Gross Domestic Product (GDP) subsidising a good that is essential for families and industries, when we have more urgent needs to resolve, such as agriculture?" he asked.
The policy of removing the fuel subsidy, argued the economist, "is essentially about improving the profile of public finance management, allocating resources to where they are really needed".
The senior economist from the WB's Global Economic Policy Department also said that the financial institution was working with the Angolan government on a new financing package worth around $750 million for this financial year.
He explained at the time that this funding aims to implement structural reforms, not only in the area of removing fuel subsidies, but also in improving the management of public finances, human capital formation, energy and technology.
DAS/ADB // ADB.
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