Angola is set to end a fuel subsidy by the end of 2025. Vera Daves de Sousa, the country’s finance minister said this should enable the state oil company Sonangol to pay taxes and dividends again.
African countries have been under heavy pressure to remove these costly benefits. The subsidy cuts have pitched governments against the masses as a result of increased prices of food and services, especially the pump price of petrol. Countries including Senegal and Nigeria have experienced subsidy removal protests.
Last month, Daves de Sousa said that the full removal of fuel subsidies might be slowed down beyond the 2025 deadline, after their partial removal led to deadly protests.
“We are taking out the fuel subsidies.End of 2025, we expect to see this process stabilise and closed as much as possible,”
We will be able to see Sonangol normally paying taxes, (improving) profits and paying dividends to the state.”
Sonangol imports refined petroleum products to Angola which it sells locally at a lower price with the government meant to reimburse the difference. It last paid a dividend in 2019, the same year the government launched an ambitious privatisation programme.
Daves de Sousa added “The company needs to continue cutting costs as well, so that “starting in 2026 (we are) seeing a different Sonangol”
Daves de Sousa also said the southern African OPEC member was considering a dual listing in 2025 or 2026 in Angola and on a yet-to-be decided international bourse for the long-delayed partial privatisation of Sonangol.
Daves de Sousa said the plans are part of President Joao Lourenco’s reform efforts to modernise the economy and attract private investment
She said 23 state-owned companies were undergoing privatisation while 43 more, including lender Banco de Fomento Angola and mobile network Unitel, were waiting to start the process.
Daves de Sousa said Insurer ENSA will be listed locally in 2024. Its chairman said in 2021 a majority stake would be sold that year.
Daves de Sousa speaking in a Bloomberg report said that apart from the fuel subsidy, the apex bank was restricting foreign currency trading to stop the kwanza from ning. She said the bank was avoiding intervention as a way of also protecting the internet.
The kwanza has traded in a slim range around 830 to the dollar since June after it fell by more than a third against the U.S. dollar as a resumption of external debt payments. Falling oil production has also cut growth and put pressure on the currency.
