Angola, sub-Saharan Africa's second-largest oil producer, plans to cut spending on fuel subsidies in 2027 without significant increases in pump prices. Instead, the government will rely on other measures to reduce costs. Under the subsidy "optimization" plan, state-owned companies will begin covering their own fuel costs rather than passing them on to the Treasury, Finance Minister Vera Daves de Sousa said late Friday.
The government has allocated 1.52 trillion kwanzas ($1.66 billion) for subsidies in 2027, less than half the 3.54 trillion kwanzas projected for fuel subsidies alone this year, according to budget documents. Angola also plans to settle 512 billion kwanzas in overdue supplier payments, prioritizing cash over Treasury bills and bonds, Daves de Sousa said. Larger debts will be paid in installments, while government securities will be used primarily to finance state operations.
The nation's 37.34 trillion-kwanza budget for 2027 is up 12.4% from this year and projects a deficit of 4.11% of gross domestic product. Gross financing needs are estimated at 15.48 trillion kwanzas, including 8.72 trillion kwanzas in debt repayments.
The plan marks a shift in how Angola manages its energy spending, moving the burden of fuel costs from the national budget to the state companies that handle petroleum operations. The approach aims to ease pressure on public finances while avoiding direct increases at the pump for consumers.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing