Angola may slow the removal of fuel subsidies to avoid a repeat of protests in June where five people were killed following a near-doubling in petrol prices.
Governments across Africa have been trying to beat rising debt by removing fuel subsidies, but the moves are proving unpopular and have also sparked discontent in countries including Senegal, Nigeria and Kenya.
"We are learning the lessons from the first movement (in fuel prices), where society reacted with shock," the southern African country's finance minister Vera Daves de Sousa stated during the International Monetary Fund and World Bank's Annual Meetings in Marrakech on Monday.
No decision has been made yet in the ongoing internal discussions on whether to extend the 2025 deadline in Angola for phasing out the subsidies.
Subsidy burden
Angola spent 1.9 trillion kwanza ($2.3 billion) on fuel subsidies in 2022, more than 40% of what the IMF estimated it spent on social programmes.
Economic growth is likely to be just 1.09% this year, down from a forecast of 3.3% in the 2023 budget, due to low oil production, meaning the oil sector is shrinking, Daves de Sousa said, adding that the forecast was 1.5% for 2024.
The 2023 budget had been prepared with oil production of 1.1 million barrels per day in mind, but it is currently averaging between 1 and 1.1 million, she stated, adding that the assumption for the 2024 budget would be less than the previous budget's.
Stabilising oil production will also help Angola's debt position, Daves de Sousa added. About 20% of its debt is collateralised, including 80% of its debt to Chinese lenders, which account for about a third, she revealed.
Sonangol privatisation
There are currently no plans to tap international capital markets. Most of Angola's overseas dollar bonds currently yield more than 13%.
"More comfortable is something around 5 and 6 (%), but we know we are quite far from that," she added.
The planned privatisation of state-oil firm Sonangol has been delayed due to ongoing corruption-related lawsuits aimed at recovering assets, Daves de Sousa revealed, with the aim now to sell less than half of the company in 2025.
