Angola's fuel subsidy expenditure for 2026 is now projected at approximately $4.16 billion, nearly double initial estimates, as elevated global energy prices increase the cost of maintaining low domestic fuel prices. Senior finance official Ottoniel dos Santos outlined a cautious approach to subsidy removal, alongside plans to diversify the economy and open Angola's domestic bond market to foreign investors.
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Fuel subsidy expenditure in Angola could reach as high as 3.8 trillion kwanzas — equivalent to roughly $4.16 billion — during 2026, a figure that would represent close to twice the government's earlier estimate of under 2 trillion kwanzas, according to a finance official who spoke to a broadcaster on Friday.
Elevated subsidy costs for domestic fuel point to a budget squeeze within the petroleum-exporting country, where global energy prices have climbed alongside the armed conflict in the Middle East.
Growing fiscal pressure is pushing the government toward a faster wind-down of its fuel and commodity support programmes — a phase-out that began in 2023 — though officials remain cautious about the pace, given concerns over the broader economic and social consequences, Ottoniel dos Santos, Angola's secretary of state for finance and the treasury, said in an interview on the margins of the International Monetary Fund and World Bank annual meetings in Bangkok. Dos Santos noted that subsidy reduction needed to proceed alongside efforts to broaden the economy's base, that the drawdown was proceeding at a measured pace for now, and that any opening allowing for a faster timeline would be taken if projected effects on lower-income households proved less than anticipated. He also noted that the country has revised its oil price outlook upward to approximately $90 per barrel by year-end, above the $61 reference figure built into the 2026 budget.
With the 2027 budget not yet filed — a submission due before the month closes — dos Santos indicated that the oil price assumption it would carry is unlikely to deviate meaningfully from the IMF's projection of $71.50 per barrel.
Projections from the administration place daily crude output at 1.045 million barrels in 2027, a volume that would hold steady against what fields are currently yielding.
Angola's $4 billion Eurobond issuance, alongside other liability management operations, has addressed the bulk of the country's borrowing requirements for the current year, dos Santos indicated, with any subsequent bond issuances or external financing decisions tied to the 2027 budget cycle. He noted that what the country ultimately pursues will depend on assessed needs for that year and whether a favourable market window presents itself, while also pointing to ongoing efforts to open the domestic government bond market to participation from overseas investors.
Angola's debt market has been opened to investors across all regions, according to officials, with steps under way to explain how the country's capital account operates. Dos Santos noted that concerns about limited exit routes do not reflect the current situation, and that the domestic market is being made accessible to outside participants.
($1 = 913.0000 kwanzas)
Angola's fuel subsidy expenditure for 2026 is now projected at approximately $4.16 billion, nearly double initial estimates, as elevated global energy prices increase the cost of maintaining low domestic fuel prices. Senior finance official Ottoniel dos Santos outlined a cautious approach to subsidy removal, alongside plans to diversify the economy and open Angola's domestic bond market to foreign investors.