https://en.sputniknews.africa/20240220/afdb-warns-of-risks-of-unrest-in-african-countries-after-fuel-subsidy-removal-1065162478.html
AfDB Warns of Risks of Unrest in African Countries After Fuel Subsidy Removal
AfDB Warns of Risks of Unrest in African Countries After Fuel Subsidy Removal
Sputnik Africa
The warnings were issued by the African Development Bank in Africa's Macroeconomic Performance and Outlook, a bi-annual publication in the first and fourth... 20.02.2024, Sputnik Africa
2024-02-20T10:44+0100
2024-02-20T10:44+0100
2024-02-20T11:07+0100
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nigeria
bola tinubu
william ruto
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ethiopia
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The African Development Bank (AfDB) has issued a stark warning of potential unrest looming over several African nations, including Nigeria, Kenya, Ethiopia and Angola, as a consequence of fuel subsidy removal and escalating living costs.In addition, the removal of fuel subsidies and other emergency measures in some countries risked adding to inflationary pressures, the bank warned.After coming to power last May, Nigerian President Bola Tinubu outlined his strategy to revive the country's economy through a series of reforms, including the removal of costly fuel subsidies, a move supported by the International Monetary Fund (IMF).The removal of subsidies has triggered a surge in commodity prices, leading to discontent among the population. Local media indicated that protests caused by rising costs have erupted in various Nigerian cities, including the capital, Abuja, the central city of Minna, and the northern city of Kano.Last week, a top aide to President Tinubu Tunde Rahman urged the Central Bank of Nigeria (CBN) to consider the political implications of its decisions amid public outcry over the impact of recent economic reforms.The removal of fuel subsidies and the weakness of the local currency have pushed inflation to a nearly three-decade high of 29.9% in January.As for Kenya, the removal of fuel subsidies was introduced by President William Ruto after he took office in September 2022.However, in August 2023, the East African nation's government reinstated a small subsidy to stabilize retail fuel prices for the next 30 days, a reversal of government policy following public outrage over the high cost of living.In January this year, the IMF criticized Kenya for reinstating fuel subsidies, saying that the lack of funds to pay oil traders would distort the budget.Speaking of the country's current economic situation, Kenya's public debt has increased by 1.93 trillion shillings ($13,3 billion) by 2023, taking the country's debt to a new high of 11.14 trillion shillings ($76 billion), the Treasury said on Tuesday.As for the other country highlighted in the AfDB report, Ethiopia, the government began phasing out fuel subsidies in July 2022. As of the end of January, regulators had excluded nearly three-quarters of the country's transport companies from the targeted fuel subsidy program, according to the Ministry of Transport and Logistics.The Angolan government announced the phasing out of fuel subsidies in June 2023, describing it as a necessary measure to promote sustainable economic growth that could address the "serious" challenges facing the country.But last October, Angola's finance minister, Vera Daves de Sousa, said the government would slow down the process, having learned a lesson from the June protests when "society reacted with shock" to fuel prices.
https://en.sputniknews.africa/20240210/nigeria-raises-over-1-bln-after-measures-to-stabilize-currency-central-bank-says-1065007287.html
https://en.sputniknews.africa/20240219/over-half-of-20-fastest-growing-economies-for-2024-are-african-countries-afdb-projects-1065155252.html
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AfDB Warns of Risks of Unrest in African Countries After Fuel Subsidy Removal
10:44 20.02.2024 (Updated: 11:07 20.02.2024) The warnings were issued by the African Development Bank in Africa's Macroeconomic Performance and Outlook, a bi-annual publication in the first and fourth quarters of each year that provides an up-to-date assessment of the continent's short- and medium-term prospects in a dynamic global economy.
The African Development Bank (AfDB) has issued a stark warning of potential unrest looming over several African nations, including Nigeria, Kenya, Ethiopia and Angola, as a consequence of fuel subsidy removal and escalating living costs.
"Internal conflicts and violence could also result from rising prices for fuel and other commodities due to weaker domestic currencies and reforms," the report said. "For instance, the removal of fuel subsidies in Angola, Ethiopia, Kenya and Nigeria and the resulting social costs has led to social unrest driven by opposition to government policy."
In addition, the removal of fuel subsidies and other emergency measures in some countries risked adding to inflationary pressures, the bank warned.
After coming to power last May, Nigerian President Bola Tinubu outlined
his strategy to revive the country's economy through a series of reforms, including the removal of costly fuel subsidies, a move supported by the International Monetary Fund (IMF).
The removal of subsidies has triggered a surge in commodity prices, leading to discontent among the population. Local media indicated that protests caused by rising costs have erupted in various Nigerian cities, including the capital, Abuja, the central city of Minna, and the northern city of Kano.
Last week, a top aide to President Tinubu Tunde Rahman urged the Central Bank of Nigeria (CBN) to consider the political implications of its decisions amid public outcry over the impact of recent economic reforms.
"The CBN governor must always pay attention to the political ramifications of his decisions,” Rahman said in the op-ed. "He must be political without being partisan."
The removal of fuel subsidies and the weakness of the local currency have pushed inflation to a nearly three-decade high of 29.9% in January.
As for Kenya, the removal of fuel subsidies was introduced by President William Ruto after he took office in September 2022.
The move was aimed at cutting public spending as the government struggles to meet debt repayments that have dogged it amid market speculation of a possible default, the presidency said then.
However, in August 2023, the East African nation's government reinstated a small subsidy to stabilize retail fuel prices for the next 30 days, a reversal of government policy following public outrage over the high cost of living.
In January this year, the IMF criticized Kenya for reinstating fuel subsidies, saying that the lack of funds to pay oil traders would distort the budget.
Speaking of the country's current economic situation, Kenya's public debt has increased by 1.93 trillion shillings ($13,3 billion) by 2023, taking the country's debt to a new high of 11.14 trillion shillings ($76 billion), the Treasury said on Tuesday.
"The increase in the public debt is attributed to external loan disbursements; exchange rate fluctuations; and uptake of domestic debt during the period," the Treasury explained.
As for the other country highlighted in the AfDB report, Ethiopia, the government began phasing out fuel subsidies in July 2022. As of the end of January, regulators had excluded nearly three-quarters of the country's transport companies from the targeted fuel subsidy program, according to the Ministry of Transport and Logistics.
The Angolan government
announced the phasing out of fuel subsidies in June 2023, describing it as a necessary measure to promote sustainable economic growth that could address the "serious" challenges facing the country.
But last October, Angola's finance minister, Vera Daves de Sousa, said the government would slow down the process, having learned a lesson from the June protests when "society reacted with shock" to fuel prices.
