Zambia temporarily suspends fuel taxes to ease impact of global oil price surge

Zambia will temporarily waive key fuel taxes in a bid to shield its economy from rising global oil prices linked to tensions in the Middle East, Finance Minister Situmbeko Musokotwane said.

The government expects to lose about $200 million in revenue over three months after suspending excise duty and zero-rating value-added tax (VAT) on petroleum products from April through June.

Musokotwane announced the measures during the ongoing Spring Meetings of the International Monetary Fund and the World Bank in Washington, where he outlined Zambia's response to global economic pressures triggered by the conflict in the Middle East and disruptions along the Strait of Hormuz, a critical global oil transit route.

He warned that the situation poses a significant risk to African economies, with the potential to drive up inflation, increase production costs and strain already tight public finances.

The minister urged African governments to adopt more forward-looking fiscal strategies, emphasizing the need to move beyond reactive crisis management. He called for policies that boost productivity, strengthen energy security and diversify economies to better withstand external shocks.

"Economies that produce more and trade more competitively are better placed to absorb shocks," he said.

While acknowledging the role of international financial support where necessary, Musokotwane stressed that domestic reforms remain essential to improving economic resilience and ensuring more effective public spending across the continent.