Editorial - The Resilience Dividend: Why Zambia Was Ready When the Shock Came

When conflict erupted in the Middle East and oil markets lurched upward, governments across Africa faced a familiar and brutal choice: absorb the pain and watch inflation erode living standards, or respond and watch the fiscal position deteriorate. Zambia acted.

Finance Minister Situmbeko Musokotwane confirmed this week that the decision to zero-rate VAT and suspend excise duty on fuel imports will cost the government around $200 million in revenue. That is a significant sum. It is also, viewed correctly, a measure of exactly how much the Hichilema administration's economic stewardship has been worth.

The painful, painstaking work of debt restructuring that defined the early years of this government was never only about satisfying creditors or unlocking IMF tranches. It was about rebuilding the fiscal headroom that a country needs to govern — to respond when the unexpected arrives, as it always does. External shocks are not anomalies. They are a permanent feature of the global economic landscape, and particularly unforgiving for commodity-dependent economies. The question is never whether a shock will come. It is whether a government has built the resilience to absorb it.

Zambia has. The fuel measures announced last month were only possible because this government chose the hard road of fiscal discipline when it would have been politically easier not to. Households and businesses facing rising energy costs are being protected — not through borrowed money or empty promises, but through genuine policy space, earned over years of difficult reform.

As Musokotwane told the IMF-World Bank Spring Meetings in Washington, African governments must pursue domestic reforms to strengthen resilience. Zambia is no longer merely making that argument. It is living proof of it.