Energy Policy & Regulation

The Zambian government said on Monday that reducing subsidies on fuel and electricity was inevitable in a bid to save government spending.

The reductions would be gradual in order to lessen the negative effects on people, Finance and National Planning Minister Situmbeko Musokotwane said at a joint press briefing with the International Monetary Fund (IMF).

The minister said the government has been spending about 67 million U.S. dollars in subsidizing fuel per month, but there would be no fuel subsidy in the 2022 national budget.

He said removing subsidies will release funds for health, education and employment.

IMF Mission Chief for Zambia Allison Holland said key economic reform issues include re-establishing fiscal sustainability and reorienting public resources towards investment in people.

On Friday, Zambia and the IMF reached a financing agreement about the provision of about 1.4 billion dollars over the next three years, which was subject to approval by the IMF Executive Board. Enditem