The African Development Bank (AfDB) said that energy subsidies are one of the reasons why Africa experiences energy insecurity.

The AfDB stated this 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.

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