Zambia extended a fuel subsidy that it had been planning to scrap to get its debt under control for three months until September, the energy minister announced on Thursday.
The surprise move came as Zambia negotiates with the IMF and its international creditors to try to restructure its unsustainably high debt, which triggered Africa's first pandemic-era default in November 2020.
"Though government policy is not to subsidise fuel imports in an attempt to trim Zambia's perennial fiscal deficit ... the government is also acutely aware of the impact that unfettered fuel price hikes cause," energy minister Peter Kapala said in a statement.
"The government has had to come in and cushion what would be a dire situation had we totally removed the subsidies as originally planned before the Ukraine war started." (Reporting by Chris Mfula; writing by Tim Cocks; editing by Jason Neely)