Angola’s economic situation continues to evolve. After the liberalization of the price of gasoline in 2021, the government decided to stop the gasoline subsidy from June 5, 2023. This decision was announced by the Minister of State for Economic Coordination during a press conference on June 2, and it aims to cut state spending on fuel subsidies that cost an estimated $3.8 billion in 2022.
Now the price of gasoline at the pump has risen from 0.49 to 0.87 USD. The government also said that the funds saved will be used for social policies like social security and housing policy.
While Angola is the fourth-cheapest country in the world for gasoline at less than a dollar a litre, its neighbors have been affected by fuel smuggling. The smugglers bought the subsidized gasoline to resell it slightly cheaper than the price set at the pump to their neighboring countries.
With the end of the subsidy, the sale of fuel has dropped for smugglers and other fraudsters, but it is promising for neighboring countries, in particular the DRC, where it is hoped that more tax revenue will be obtained thanks to the reduction of unfair competition. .
The end of the gasoline subsidy is a trend that is gaining more and more African oil-producing countries. Nigeria also recently ended the subsidy. These decisions were driven by the need to cut government spending and tackle negative effects like smuggling.
Beyond economic policies, the situation in the region remains fragile, on the one hand because of insecurity, which has a direct impact on the lives of populations, and on the other hand, the situation of gender inequalities. in the Congolese media, which remains alarming, as shown in the latest UCOFEM study.
It is important, in this period of transition, that the governments of the region continue to work for inclusive and sustainable policies that will benefit every citizen.