2016年-世界发展银行全球_Republic_of_Angola_Poverty_and_Social_Impact_Analysis___Subsidy_Reform_and_Extension_of_Social_Protection_Program_45页_1mb

Summary of the Report: Republic of Angola Poverty and Social Impact Analysis

Core Content

This report, titled "Republic of Angola Poverty and Social Impact Analysis" (Report No: ACS19693), published by the International Bank for Reconstruction and Development/ The World Bank on June 22, 2016, analyzes the impact of fuel subsidy reforms and the extension of the Cartão Kikuia social protection program on poverty in Angola.

Main Views

1. Fuel Subsidy Reform

• Context and Need for Reform:
  Angola, as the second-largest oil producer in Africa, faced unsustainable government expenditures due to the sharp drop in international oil prices starting in 2014. This led to a fiscal crisis and the need for comprehensive reforms.

• Description of Reforms:
  The reform included the gradual elimination of most fuel subsidies and the extension of the social protection program Cartão Kikuia. Fuel price subsidies were reduced over time, with most eliminated by December 2015, except for LPG and kerosene, which were reduced to 38.6% and 11.4%, respectively.

• Channels of Impact on Poverty:

  • Direct Impact: Higher fuel prices reduced household consumption, particularly among wealthier households.
  • Indirect Impact: Increased production and operational costs due to higher fuel prices led to higher prices for other goods and services, further affecting household budgets.
  • The indirect impact was estimated to be twice as large as the direct impact.

• Poverty Impact of Reforms:

  • The elimination of fuel subsidies increased the poverty head count rate by about 2 percentage points, raising it from 26% to 28%.
  • Urban households were more affected than rural ones due to higher fuel dependency and lower self-sufficiency in rural areas.
  • Fuel subsidies were regressive, with better-off households benefiting more due to their higher consumption of fuel products.

• Cost of Fuel Subsidies:

  • Fuel subsidies accounted for 63% of real prices in September 2014, varying significantly across products.
  • They represented 7.5% of household expenditures for the top 20% of households, compared to less than 1% for the bottom 20%.

2. Extension of Cartão Kikuia

• Program Overview:
  The Cartão Kikuia is a non-cash transfer program aimed at helping vulnerable families, especially those headed by women, purchase essential goods such as food and agricultural inputs. It was initially implemented in six provinces with around 60,000 beneficiaries by the end of 2015.

• Effectiveness of Transfers:

  • Annual transfers below 60,000 Kwanza were not effective in reducing poverty.
  • A 10,000 Kwanza transfer provides only 2% of the consumption needed to meet the 1.90 USD PPP poverty line for a family of three.
  • A 120,000 Kwanza transfer could halve poverty (from 26% to 15%) and reduce the poverty gap from 8.3% to 3.4%, but at a cost equivalent to 0.7% of GDP.

• Targeting Mechanisms:

  • The current targeting system uses categorical eligibility criteria (e.g., female-headed households, households with disabled members) and community-based assessments.
  • The categorical criteria do not improve targeting compared to random selection.
  • The community-based component is difficult to assess due to data limitations, but the observed beneficiary characteristics suggest a reasonably functioning targeting mechanism.

• Challenges and Recommendations:

  • The program faces implementation challenges, including limited access to Kikuia Stores, low product availability, and technical issues with card recognition.
  • Cash transfers, as seen in Brazil’s Bolsa Familia, are more efficient and transparent, allowing beneficiaries to use funds according to their needs.
  • Recommendations include improving targeting transparency, enhancing infrastructure, and learning from successful programs like Bolsa Familia.

Key Information

• Poverty Trends:

  • Poverty in Angola dropped slightly in 2015, from 50% in rural areas to 46%, reducing the gap between female and male-headed households to about 2 percentage points.
  • The Gini coefficient fell marginally from 52 in 2000 to 43 in 2008 and further to 42 in 2015.

• Economic Context:

  • Oil exports accounted for 95% of total exports from 2005 to 2014, with China as the main importer.
  • Fuel prices were among the lowest in the world, significantly below sub-Saharan Africa averages.
  • Fuel subsidies were costly and crowded out growth-enhancing spending, with fuel subsidies accounting for more than education and 42% more than health in 2014.

• Fiscal Impact:

  • Fuel subsidies were a major component of government spending, representing around 63% of real fuel prices in 2014.
  • The elimination of subsidies created fiscal space to increase social protection allocations.

• Inflation and Economic Slowdown:

  • The drop in oil prices led to higher inflation, with prices increasing by 184% from 2006 to 2014.
  • Economic growth slowed significantly from 17.3% (2004–2008) to 2.5% (2016).

• Methodology:

  • The report uses micro-level simulations based on the 2008 IBEP household survey, projected to 2015.
  • It includes M&E frameworks for evaluating the effectiveness of the Cartão Kikuia program.

Conclusion

The fuel subsidy reform and the extension of the Cartão Kikuia program are central to addressing the fiscal and poverty impacts of declining oil prices. While the fuel subsidy reform increased poverty due to regressive impacts, the extension of social protection aimed to mitigate these effects. However, the current design and implementation of Cartão Kikuia are inefficient and opaque, and the report suggests improvements in transparency, targeting, and infrastructure to enhance its effectiveness.

The report also highlights the importance of learning from successful social protection programs like Bolsa Familia in Brazil, which is a cash-based, transparent, and efficient program. The extension of Cartão Kikuia is expected to have a significant impact on poverty reduction, but it requires better targeting mechanisms and improved program design to achieve its goals effectively.

Recommendations

• Improve targeting transparency and data collection for the Cartão Kikuia program.
• Enhance infrastructure for the distribution of benefits, including expanding the number of Kikuia Stores and improving product availability.
• Consider cash transfers as a more effective alternative to in-kind transfers.
• Learn from successful models like Brazil’s Bolsa Familia to improve the efficiency and reach of social protection programs.