Minister of Finance and National Planning, has disclosed that Zambia has lost approximately US$200 million in revenue due to tax relief measures introduced to cushion citizens and businesses from high fuel prices, arising from the conflict in the Middle-East.
The measures include the suspension of Value Added Tax (VAT) and excise duty on petrol and diesel imports for three months, effective 1st April 2026, to ease the burden on consumers.
Dr. Situmbeko Musokotwane made the remarks when he shared Zambia’s experiences in addressing the emerging war-induced global economic crisis, at the ongoing Spring Meetings of the IMF and the World Bank in Washington D.C., USA.
In his remarks to delegates at the over-subscribed IMF Africa Fiscal Forum, Dr. Musokotwane called for broader and more strategic use of fiscal policy across Africa.
He emphasized that the continent must move beyond managing recurring shocks and begin using public policy more deliberately to raise productivity, strengthen energy security, and transform the structure of its economies.
Dr. Musokotwane identified the most immediate risk facing many African economies over the next 12 months as a possible energy crisis arising from the conflict in the Gulf region.
“Such a development could intensify inflationary pressures, raise production costs, and place additional strain on already constrained fiscal positions,” Dr. Musokotwane noted.
While indicating that support from institutions such as the IMF would be welcome where necessary, the Minister stressed that African governments must also continue undertaking domestic reforms that improve resilience and strengthen the quality of public spending.
“One of the clearest responsibilities of fiscal policy is to shift resources away from inefficient subsidies and toward areas with greater long-term social and economic value,” he said.
He cited Zambia’s re-orientation from generalized fuel subsidies towards free education and other social sectors as an example of a more purposeful use of public resources.
Dr. Musokotwane also pointed to the use of digital systems in agricultural support programs as a practical reform that has helped improve targeting, reduce waste, and remove ineligible beneficiaries who had previously taken advantage of public support intended for genuine farmers.
He urged the forum to address what he termed Africa’s underlying development challenge — a narrow productive base and a shrinking share of global trade, despite the continent’s abundant natural resources, youthful population, and significant economic potential.
Dr. Musokotwane questioned why Africa has fallen behind in sectors and commodities that once had strong roots on the continent, and why many of the goods consumed globally are now produced elsewhere by countries that made earlier and more disciplined investments in productivity, skills, manufacturing, and value addition.
