Consumers should expect a rise in fuel hikes due to conditions attached to the International Monetary Fund (IMF).
The IMF Board recently approved a new Extended Credit Facility (ECF) arrangement for Zambia on August 31st, 2022.
The $1.3 billion 38-month program is expected to underpin government’s efforts to restore macroeconomic stability and foster higher, more resilient, and more inclusive growth.
However, according to the IMF Report one of the conditions of the IMF bailout package is removing implicit subsidies on fuel.
The Report noted the need to address fiscal imbalances while creating additional space for social spending.
Meanwhile, the ECF-supported programme will target sustained fiscal consolidation through reforms and curtailing of ‘wasteful’ subsidies such as removing all fuel subsidies in 2022.
Meanwhile, as such, the country is expected to brace up for fuel pump price hikes in the long run.
Currently, the country is enjoying fuel pump price reductions banked on the strengthening local currency, Kwacha.
The Kwacha is one of the most performing currencies in the world.