IMF representative in Angola recommends elimination of state subsidies

2 July 2019

The resident representative of the International Monetary Fund (IMF) in Angola, has called for the elimination of state subsidies for water and electricity consumption, in an interview with the Jornal de Angola newspaper.

Max Alier justified his proposal based on the fact that subsidies to public services and fuel prices were inefficient, encouraged excessive consumption and disproportionately benefitted those on higher incomes.

While recommending its elimination, the IMF representative said that he was aware that people with the lowest incomes would be the most affected, and that the programme to be implemented in Angola recommends that fuel price adjustment take place simultaneously with the launch of an income exchange programme, which is being developed with assistance from the World Bank.

Referring to the Extended Funding Facility (EFF) in Angola, he said that IMF programmes are subject to periodic reviews, in this case half-yearly, with a view to assessing whether the country’s authorities have kept to their commitments and, if not, what actions should be taken to ensure compliance with them.

The approved programme for Angola has a financial package of US$3.7 billion, with the first tranche of US$1 billion paid out in December 2018 when the programme was approved.

The following six installments will be paid out after the successful completion of the six-monthly reviews, with the current schedule including installments of US$250 million in the first and second reviews and approximately US$560 million in the last four reviews. (Macauhub)