Angola Ends Diesel Subsidies to Free $3b for Social Spending

25 March 2025
Daba Finance (Abidjan)
  • Angola has removed diesel subsidies, raising pump prices by 50% as part of an International Monetary Fund-backed plan to redirect public funds
  • As of Monday, diesel cost 300 kwanzas ($0.33) per liter, up from 200 kwanzas marking second increase in a year
  • The IMF estimates the move could free up $3 billion--equivalent to Angola's current combined health and education budget

Angola has removed diesel subsidies, raising pump prices by 50% as part of an International Monetary Fund-backed plan to redirect public funds toward health and education. As of Monday, diesel now costs 300 kwanzas ($0.33) per liter, up from 200 kwanzas. This marks the second increase in a year, following an earlier hike from 140 to 200 kwanzas in April 2024.

The IMF estimates the move could free up $3 billion--equivalent to Angola's current combined health and education budget. The government aims to use the savings to boost social spending and stabilize its recovering economy.

However, the policy shift is drawing backlash. Angola's truck drivers union, representing 3,500 members, expressed opposition and warned of potential disruptions, citing rising transport costs. A final stance will be decided in a meeting on April 11. The change echoes last year's gasoline subsidy cut, which triggered violent protests in Huambo, leaving five people dead.

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Key Takeaways

Angola's diesel subsidy removal highlights the fiscal balancing act many African nations face--trading short-term public discontent for long-term budget reallocation. While the IMF sees subsidy cuts as a way to unlock vital funding, the social cost is significant in a country where over half the population lives on less than $2 per day. The effectiveness of this policy will depend on how quickly the government can deploy savings into visible, high-impact programs like education, healthcare, and transport support for vulnerable groups. Without that, the political risk and social backlash could undermine the reform's goals.

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