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Angola’s finance minister, Sousa hints at possible slowdown of fuel subsidy removal

Published

1 year ago

October 9, 2023

Angola’s finance minister, Vera Daves de Sousa has hinted that the country might slow the removal of fuel subsidies to avoid a repeat of protests in June over a near-doubling in petrol prices.

The Central African country was enmeshed in wild deadly protests in which at least five people were killed when a removal of fuel subsidy was announced earlier this year.

According to the minister, during an interview on the sidelines of the International Monetary Fund and World Bank Annual Meetings, no decision had been made yet over ongoing internal discussions on whether to extend the end-2025 deadline for phasing out the subsidies.

She added that although the expectation for the 2023 budget was 1.1 million barrels per day of oil output, the actual production was now averaging between 1 and 1.1 million. She also mentioned that the 2024 budget would be lower than the 2023 budget’s assumption.

According to Daves de Sousa, there were no current intentions to access international capital markets. The majority of Angola’s foreign dollar bonds currently have yields of over 13%.

“More comfortable is something around 5 and 6 (%), but we know we are quite far from that,” she said.

Governments across Africa are attempting to reverse expensive subsidies as a result of mounting debt bills, but the measures are proving controversial and have also prompted unrest in nations like Senegal and Nigeria.

Angola, like Nigeria and several other oil-producing countries in the continent, does not refine sufficient crude locally, thus putting extra costs on the (refined) product and putting pressure on the foreign exchange with which refining payments are made.

Zambia and Kenya, among others, have also all adjusted prices in petrol products upward in the last three months.

Related Topics:Angola Featured Fuel subsidy

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IMF mission concludes 4th loan program assessment in Egypt

Published

3 days ago

November 22, 2024

Ifeoluwa Dada

Following the completion of a recent visit to Egypt, the International Monetary Fund (IMF) has announced that its mission had achieved significant strides in policy talks aimed at concluding the fourth review of the IMF loan program.

The review is the fourth in Egypt’s most recent 46-month IMF loan program, which was authorised in 2022 and increased to $8 billion this year following an economic crisis characterised by high inflation and chronic foreign exchange shortages. It may unleash more than $1.2 billion in financing.

Along with reaffirming its commitment to maintain a flexible exchange rate system, the IMF stated that Egypt “has implemented key reforms to preserve macroeconomic stability,” including the unification of the currency rate that facilitated imports.

Earlier on Wednesday, Egypt’s Prime Minister Mostafa Madbouly said Cairo has asked the IMF to modify the targets for the programme not only for this year, but for its full duration, he added without giving more details.

“Discussions will continue over the coming days to finalize agreement on the remaining policies and reforms that could support the completion of the fourth review,” the IMF added in its statement.

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Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

5 days ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.