AfDB has said that energy subsidies contribute to energy insecurity in Africa due to their distortionary nature In its Macroeconomic Performance and Outlook for 2023
The African Development Bank (AfDB) said that energy subsidies are one of the reasons why Africa experiences energy insecurity.
The AfDB informs in its 2023 Africa’s Macroeconomic and Performance Outlook report which was released on Thursday, January 19.
In the report, the AfDB explained that energy subsidies are controversial due to their distortionary nature. This is despite the fact that energy subsidies are the most available and essential fiscal and political tools that governments on the continent use to protect households against potential welfare losses arising from food and energy prices and other exogenous shocks.