Analysis-Caught between riots and debt crises, African countries cut fuel subsidies
By Libby George
LONDON (Reuters) — Abdoulaye Diallo is paying over 50% more to fill up his «thiak-thiak» motorbike taxi in Keur Mbaye Fall, a suburb of Senegal's capital Dakar, than he was before the government began lifting fuel subsidies in January.
Diallo, 25, is already navigating punishing inflation and deadly political riots, but his biggest problem is he cannot pass on the cost of filling his fuel tank, which has risen to 3,500 CFA ($5.82), from 2,000 CFA last year.
«The customers...don't realize how difficult it is,» Diallo said. «That's the kind of thing we need to protest against.»
Senegal, like Nigeria and Angola, is removing costly fossil fuel subsidies – a move once considered politically unthinkable but which has become a necessity due to crushing debt, a spike in borrowing costs and high fuel prices.
Global spending on fossil fuel consumption subsidies doubled to a record $1 trillion last year as the war in Ukraine sent oil prices skyrocketing, according to the International Energy Agency (IEA).
Senegal's fuel and electricity supports gobbled up 4% of GDP last year, while Nigeria spent $10 billion capping the price of petrol. Angola spent 1.9 trillion kwanza ($2.3 billion) in 2022, which is more than 40% of what the IMF estimated it spent on social programmes.
«The cost is too high for us to continue to pay,» said Stanley Achonu, Nigeria director of the ONE Campaign, which advocates for sustainable debt and an end to poverty.
SHEER FISCAL NECESSITY
Nearly every country on earth has some fossil fuel subsidies, according to the Organisation for Economic Co-operation and Development (OECD). Costs ballooned when governments stepped in to shield citizens from punishingly high energy bills after Russia invaded
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