Angola has become the latest African country to remove fuel subsidies, following advice from the International Monetary Fund (IMF), in a bid to bolster economic growth and free up funds for critical sectors. The country has eliminated diesel subsidies, causing the price to surge by 50%, according to a recent report by Bloomberg.

This move marks the second time Angola has cut down subsidies, with the cost of living in the Southern African country continuing to bite down on residents. In April 2024, the country had increased diesel prices from 140 Kwanza to 200 Kwanza. The latest increase, which took effect on Monday, has driven diesel prices up to 300 kwanzas ($0.33) per liter, up from 200 kwanzas.

The IMF, which advised the move, argued that it could free up to $3 billion, the same amount allocated to the country's health and education budgets. Eliminating subsidies may allow the government to boost spending in other sectors, but it is also expected to drive up transport costs in a country where the World Bank reports that over half of the 37 million population survives on less than $2 a day.

The decision has sparked concerns among locals, with the president of Angola's truck drivers association, Sabino Vieira da Silva, expressing dissatisfaction with the fuel price increase. "We've warned the government about the potential consequences of the fuel price increase," he said, adding that his members will meet on April 11 to decide an official position on the matter.

This move is not without precedent, as a comparable move to remove gasoline subsidies in 2023 sparked violent protests in Huambo, a city in central Angola, resulting in deadly clashes between taxi drivers and the police that left five people dead. The economic ripple effects of removing fuel subsidies can be significant, as seen in Nigeria, where subsidy removal has driven hyperinflation.

While the debate surrounding the effects of removing fuel subsidies continues, there is an underlying understanding that removing subsidies is generally a good idea. However, the impact on local economies and populations must be carefully considered to avoid unintended consequences. As Angola navigates this new economic landscape, it remains to be seen how the removal of fuel subsidies will affect the country's growth and development in the long run.

The trend of African countries removing fuel subsidies is likely to continue, with the IMF advising countries to eliminate subsidies to free up funds for critical sectors. As the economic landscape continues to evolve, it will be important to monitor the impact of these decisions on local populations and economies.