Zambia removes fuel subsidy from 2022 national budget

By Bisola Adeyemo

Zambia government has announced on Monday that there would be no fuel subsidy in the 2022 national budget.

Finance and National Planning Minister Situmbeko Musokotwane said at a joint press briefing with the International Monetary Fund (IMF).

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

According to the minister, about 67 million U.S. dollars have been spent by the government in subsidizing fuel per month.

Therefore reducing subsidies on fuel and electricity was inevitable in a bid to save government spending.

He added that the reductions would be gradual to lessen the negative effects on people.

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.