{"id":50348,"date":"2024-04-02T16:33:37","date_gmt":"2024-04-02T15:33:37","guid":{"rendered":"https:\/\/www.climatechangenews.com\/?p=50348"},"modified":"2024-04-02T17:21:15","modified_gmt":"2024-04-02T16:21:15","slug":"zambias-fossil-fuel-subsidy-cuts-help-climate-and-kids-but-taxi-drivers-suffer","status":"publish","type":"post","link":"https:\/\/www.climatechangenews.com\/2024\/04\/02\/zambias-fossil-fuel-subsidy-cuts-help-climate-and-kids-but-taxi-drivers-suffer\/","title":{"rendered":"Zambia&#8217;s fossil-fuel subsidy cuts help climate and kids &#8211; but taxi drivers suffer"},"content":{"rendered":"<p><strong>The Zambian government\u2019s cuts to fossil fuel subsidies may be helping reduce the use of planet-heating oil &#8211; but they are causing hardship among groups that rely disproportionately on fossil fuels to make a living, including taxi drivers.<\/strong><\/p>\n<p>The green policy aims to boost both climate action and the heavily-indebted Zambian economy, but taxi drivers in Lusaka, the southern African country\u2019s capital, told Climate Home they are suffering from rising prices for driving and food.<\/p>\n<p><span style=\"font-weight: 400;\">\u201cWe have been hit hard,\u201d said 29-year old Masuzyo Kampamba, as he motored down a two-lane highway towards past crowds of children celebrating national youth day last month.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Kampamba doesn\u2019t feel able to get married and start a family as he would not be able to provide for them due to the high cost of living.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Waiting outside the upmarket East Park Mall, driver Stephen Musanda said he is struggling too.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Filling up his regular Toyota taxi used to cost 17 kwacha ($0.70) a litre &#8211; for which he now pays 31 kwacha ($1.30). \u201cIt&#8217;s hard for a common driver like me to survive,\u201d he said.<\/span><\/p>\n<div id=\"attachment_50355\" style=\"width: 810px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-50355\" class=\"wp-image-50355 size-full\" src=\"https:\/\/cdn.climatechangenews.com\/files\/2024\/03\/21171508\/Petrol-station.jpg\" alt=\"Zambian taxis drivers are hit by the fossil-fuel subsidy cuts\" width=\"800\" height=\"600\" srcset=\"https:\/\/cdn.climatechangenews.com\/files\/2024\/03\/21171508\/Petrol-station.jpg 800w, https:\/\/cdn.climatechangenews.com\/files\/2024\/03\/21171508\/Petrol-station-224x168.jpg 224w, https:\/\/cdn.climatechangenews.com\/files\/2024\/03\/21171508\/Petrol-station-449x337.jpg 449w, https:\/\/cdn.climatechangenews.com\/files\/2024\/03\/21171508\/Petrol-station-768x576.jpg 768w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><p id=\"caption-attachment-50355\" class=\"wp-caption-text\">A Total petrol station near Lusaka&#8217;s Central Business District on March 10, 2024 (Photo: Joe Lo)<\/p><\/div>\n<h3><b>IMF\u2019s global push<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">In debt-strapped developing countries like Zambia, the International Monetary Fund (IMF) is using its financial power to push for the removal of fossil fuel subsidies. <\/span>Similar IMF-backed policies in <a href=\"https:\/\/www.independent.co.uk\/news\/world\/americas\/haiti-prime-minister-resigns-jack-guy-lafront-fuel-prices-subsidy-imf-a8447976.html\" target=\"_blank\" rel=\"noopener\">Haiti<\/a> and <a href=\"https:\/\/www.iisd.org\/articles\/lesson-ecuador-fossil-fuel-subsidies\" target=\"_blank\" rel=\"noopener\">Ecuador<\/a> have led to mass protests in the last few years.<\/p>\n<p>At the Cop28 UN climate summit last December, governments agreed to contribute to a global effort to transition away from fossil fuels &#8220;in a just, orderly and equitable manner&#8221;. What that means in practice is still being worked out.<\/p>\n<p>In Zambia and other places like Nigeria, many ordinary citizens feel the shift away from fossil fuel subsidies has not been done fairly so far, with the burden falling on those who cannot afford it. Even supporters of the reforms in Zambia admit they are &#8220;painful&#8221;.<\/p>\n<p><span style=\"font-weight: 400;\">On a global level, the IMF argues that subsidies incentivise the use of fossil fuels like oil and gas, making climate change worse, while also being expensive, wasteful and skewed towards helping the rich more than the poor.<\/span><\/p>\n<blockquote class=\"twitter-tweet\">\n<p dir=\"ltr\" lang=\"en\">My message at today\u2019s <a href=\"https:\/\/twitter.com\/wef?ref_src=twsrc%5Etfw\">@wef<\/a> session on climate and nature: pull back on harmful fossil fuel subsidies and use those resources for climate action. With action, we can leave a heathy planet to our children and grandchildren. <a href=\"https:\/\/twitter.com\/hashtag\/wef24?src=hash&amp;ref_src=twsrc%5Etfw\">#wef24<\/a> <a href=\"https:\/\/t.co\/Uh7TcyafHI\">pic.twitter.com\/Uh7TcyafHI<\/a><\/p>\n<p>\u2014 Kristalina Georgieva (@KGeorgieva) <a href=\"https:\/\/twitter.com\/KGeorgieva\/status\/1747716910270050759?ref_src=twsrc%5Etfw\">January 17, 2024<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><br \/>\n<span style=\"font-weight: 400;\">In a bid to boost sustainable development, the Washington-based lender has encouraged governments to spend the savings from reducing their support for fossil fuels on climate action, healthcare or education. Zambia has used the money it has freed up for paying down the national debt and making public schools free.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Richard Bridle, a subsidies expert at the International Institute for Sustainable Development (IISD), generally supports such reforms, but said proper analysis must be carried out to identify those most affected and compensate them.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cGenerally, the poor don\u2019t have cars,\u201d he said, but there are &#8220;particularly affected groups&#8221; whose business costs are exposed to fuel prices &#8211; like taxi drivers &#8211; and they require special attention. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cYou\u2019ve got to have steps being taken to understand the impact, particularly on the most vulnerable groups, and &#8211; where possible &#8211; mitigate that impact,\u201d Bridle said.<\/span><\/p>\n<p><b>Education not petrol<\/b><\/p>\n<p><span style=\"font-weight: 400;\">When Zambian President Hakainde Hichilema was elected in August 2021, he <\/span><a href=\"https:\/\/www.reuters.com\/markets\/rates-bonds\/zambia-imf-programme-will-entail-removing-energy-farm-subsidies-2021-12-06\/\"><span style=\"font-weight: 400;\">inherited<\/span><\/a><span style=\"font-weight: 400;\"> $800 million a year of spending on fossil fuel subsidies &#8211; 4% of gross domestic product (GDP) &#8211; and debt of almost $1 billion which the government was failing even to pay interest on.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">He turned to the IMF for another loan &#8211; and in December 2021, Zambia was granted a $1.4-billion extended credit facility.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Announcing this credit, the IMF\u2019s then mission chief for Zambia, Allison Holland, <\/span><a href=\"https:\/\/www.reuters.com\/markets\/rates-bonds\/zambia-imf-programme-will-entail-removing-energy-farm-subsidies-2021-12-06\/\"><span style=\"font-weight: 400;\">said<\/span><\/a><span style=\"font-weight: 400;\"> the conditions were that Zambia should cut what the IMF sees as \u201cinefficient\u201d subsidies, reduce its debt level, and increase spending on education and health.\u00a0<\/span><\/p>\n<blockquote class=\"twitter-tweet\">\n<p dir=\"ltr\" lang=\"en\">ZAMBIA&#8217;S <a href=\"https:\/\/twitter.com\/hashtag\/IMF?src=hash&amp;ref_src=twsrc%5Etfw\">#IMF<\/a> PROGRAMME: Message from the IMF Mission Chief for Zambia, Ms. ALLISON HOLLAND.<a href=\"https:\/\/twitter.com\/S_Musokotwane?ref_src=twsrc%5Etfw\">@S_Musokotwane<\/a> <a href=\"https:\/\/twitter.com\/KGeorgieva?ref_src=twsrc%5Etfw\">@KGeorgieva<\/a> <a href=\"https:\/\/twitter.com\/IMFAfrica?ref_src=twsrc%5Etfw\">@IMFAfrica<\/a> <a href=\"https:\/\/t.co\/j17kCKck8t\">pic.twitter.com\/j17kCKck8t<\/a><\/p>\n<p>\u2014 Ministry of Finance &amp; National Planning &#8211; Zambia (@mofnpzambia) <a href=\"https:\/\/twitter.com\/mofnpzambia\/status\/1566509052846391296?ref_src=twsrc%5Etfw\">September 4, 2022<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p><span style=\"font-weight: 400;\">The IMF <\/span><a href=\"https:\/\/www.imf.org\/en\/Topics\/climate-change\/energy-subsidies#:~:text=In%202009%2C%20the%20Group%20of,out%20inefficient%20fossil%20fuel%20subsidies.\"><span style=\"font-weight: 400;\">sees<\/span><\/a><span style=\"font-weight: 400;\"> subsidies as \u201cinefficient\u201d if they hinder economic growth, exacerbate air pollution and climate change, and benefit those with high incomes. Holland said fuel subsidies were an example of spending that is &#8220;wasteful&#8221; and &#8220;doesn&#8217;t help the poor&#8221;.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In response, the government completely removed direct\u00a0fossil fuel subsidies for 2022 and, in October that year, <\/span>it <a href=\"https:\/\/zambia.actionaid.org\/news\/2023\/actionaid-press-statement-latest-fuel-pump-price-hike\"><span style=\"font-weight: 400;\">restored taxes<\/span><\/a><span style=\"font-weight: 400;\"> on petrol and diesel which the previous government had cut.<br \/>\n<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Hichilema also announced that public school education would be made free from January 2022. \u201cWhen we removed fuel subsidies, this is what we intended for our people,\u201d he said in a post on X, formerly known as Twitter.<\/span><\/p>\n<blockquote class=\"twitter-tweet\">\n<p dir=\"ltr\" lang=\"en\">Ever imagined that you\u2019d be entering January without worrying about school fees? Jan 2022, if you have a child in public school, you won&#8217;t pay anything.<br \/>\nThis is what we promised &amp; have delivered. When we removed fuel subsidies, this is what we intended for our people. <a href=\"https:\/\/twitter.com\/hashtag\/Zambia?src=hash&amp;ref_src=twsrc%5Etfw\">#Zambia<\/a> <a href=\"https:\/\/t.co\/b49D9CTigV\">pic.twitter.com\/b49D9CTigV<\/a><\/p>\n<p>\u2014 Hakainde Hichilema (@HHichilema) <a href=\"https:\/\/twitter.com\/HHichilema\/status\/1476142922487717899?ref_src=twsrc%5Etfw\">December 29, 2021<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p><span style=\"font-weight: 400;\">The government is planning to boost spending on social protection too. In 2020, it spent just 0.7% of GDP on welfare programmes like giving money and food to poor people, but by 2025 it plans to raise this to 1.6%, bringing it in line with the African average.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cOverall, for low-income households, the benefits from increased social spending should outweigh the impact from the removal of fuel and electricity subsidies,\u201d a 2022 IMF <a href=\"https:\/\/www.imf.org\/en\/Publications\/CR\/Issues\/2022\/09\/06\/Zambia-Request-for-an-Arrangement-Under-the-Extended-Credit-Facility-Press-Release-Staff-523196\" target=\"_blank\" rel=\"noopener\">analysis<\/a> said.<\/span><\/p>\n<p><b>Painful but necessary<br \/>\n<\/b><\/p>\n<p><span style=\"font-weight: 400;\">During a reporting trip this March, Climate Home asked Zambia\u2019s environment minister, a farmer and a rural teacher about the fuel subsidy cuts. All said the measures had been painful, making driving, farming and eating more expensive &#8211; but they saw them as necessary.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Green economy and environment minister Collins Nzovu said \u201cthere is going to be pain\u201d from removing subsidies, but asked \u201cwere we going to keep accumulating debt or we\u2019re going to say this is where we end?\u201d\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In the village of Katoba in Lusaka province, secondary school teacher Constancy Mbwenya said spending on subsidies had previously diverted money from health and education.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The subsidy cuts are \u201ca good policy\u201d, he said, but required a period of adjustment. \u201cPeople need to acclimatise to the new situation,&#8221; he explained. &#8220;That\u2019s where the hassle is a bit, but then eventually people will understand the importance of removing the subsidies.\u201d<\/span><\/p>\n<blockquote><p><a href=\"https:\/\/www.climatechangenews.com\/2024\/03\/11\/is-water-provision-in-drought-hit-zambia-climate-loss-and-damage-or-adaptation\/\" target=\"_blank\" rel=\"noopener\"><strong>Is water provision<\/strong> in drought-hit Zambia climate \u2018loss and damage\u2019 or adaptation?<\/a><\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\">At the steering wheel, Musanda and Kampamba welcomed free education &#8211; although they questioned whether there are enough teachers per pupil, and whether the children can afford to eat at home because of food inflation.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cIt\u2019s right because those who were not going to school&#8230; are now going to school,\u201d said Musanda. But, he added, &#8220;it is difficult for us who used to survive on subsidies\u201d.<br \/>\n<\/span><\/p>\n<p><span style=\"font-weight: 400;\">IISD&#8217;s Bridle compared the situation to France\u2019s &#8220;gilets jaunes&#8221; (yellow vest) protests, sparked in late 2018 when the French government tried to hike taxes on petrol and diesel and spend the money on climate action.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The rural working class felt the costs of green policies were falling unfairly on them, while they failed to see direct benefits, Bridle said. The large-scale opposition to the policy forced the government into a U-turn and hurt the popularity of French President Emmanuel Macron.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Taxi driver Musanda said similar social unrest was unlikely in Zambia: \u201cWe are not used to doing protests.\u201d Instead, many voters might look to bring in a new government at the country\u2019s next elections in 2026, he noted. <\/span><\/p>\n<p>According to Bridle, that risk is why governments often rush through reforms well ahead of the next election.\u00a0<span style=\"font-weight: 400;\"><strong><br \/>\n<\/strong><\/span><\/p>\n<p>In Zambia, less than one in 20 people <a href=\"https:\/\/www.nationmaster.com\/nmx\/timeseries\/zambia-vehicles-in-use\" target=\"_blank\" rel=\"noopener\">own a vehicle<\/a>, so the vast majority are less affected by the subsidy increase than Musanda.<\/p>\n<div id=\"attachment_50449\" style=\"width: 810px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-50449\" class=\"wp-image-50449 size-full\" src=\"https:\/\/cdn.climatechangenews.com\/files\/2024\/04\/02110822\/Benson-Chipungu2.jpg\" alt=\"\" width=\"800\" height=\"600\" srcset=\"https:\/\/cdn.climatechangenews.com\/files\/2024\/04\/02110822\/Benson-Chipungu2.jpg 800w, https:\/\/cdn.climatechangenews.com\/files\/2024\/04\/02110822\/Benson-Chipungu2-224x168.jpg 224w, https:\/\/cdn.climatechangenews.com\/files\/2024\/04\/02110822\/Benson-Chipungu2-449x337.jpg 449w, https:\/\/cdn.climatechangenews.com\/files\/2024\/04\/02110822\/Benson-Chipungu2-768x576.jpg 768w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><p id=\"caption-attachment-50449\" class=\"wp-caption-text\">Corn and peanut farmer Benson Chipungu poses in his field on March 7, 2024 (Photo: Joe Lo)<\/p><\/div>\n<p>Benson Chipungu, who spoke to Climate Home on his maize and peanut farm in Chongwe village, 50 km east of Lusaka, said it now costs him more to fill up his tractor with diesel &#8211; but <span style=\"font-weight: 400;\">he is willing to accept the change nonetheless. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cI think it\u2019s fine because [the government] has made that decision knowing that maybe the subsidies were being a burden on the economy,\u201d he said. <\/span><span style=\"font-weight: 400;\">\u201cIt can be painful &#8211; but if&#8230; they think it\u2019s going to come out right, then it\u2019s fine &#8211; you can try to hang in there.\u201d<br \/>\n<\/span><\/p>\n<p><em>Travel for this story was funded by Catholic Relief Services.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"Under pressure from the IMF, the government has redirected subsidies into education, welfare and debt reduction, leaving fuel-heavy sectors with higher costs ","protected":false},"author":56,"featured_media":50354,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4272,1483],"tags":[706,2394,4081],"coauthors":[4545],"class_list":["post-50348","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fossil-fuel-subsidies","category-un-climate-talks","tag-fossil-fuel-subsides","tag-imf","tag-zambia","type-news"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Zambian taxis drivers are hit by the fossil-fuel subsidy cuts<\/title>\n<meta name=\"description\" content=\"The Zambian government redirected the fossil-fuel subsidy into education, welfare and debt reduction, increasing costs for fuel-heavy sectors.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.climatechangenews.com\/2024\/04\/02\/zambias-fossil-fuel-subsidy-cuts-help-climate-and-kids-but-taxi-drivers-suffer\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Zambian taxis drivers are hit by the fossil-fuel subsidy cuts\" \/>\n<meta property=\"og:description\" content=\"The Zambian government redirected the fossil-fuel subsidy into education, welfare and debt reduction, increasing costs for fuel-heavy sectors.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.climatechangenews.com\/2024\/04\/02\/zambias-fossil-fuel-subsidy-cuts-help-climate-and-kids-but-taxi-drivers-suffer\/\" \/>\n<meta property=\"og:site_name\" content=\"Climate Home News\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/ClimateHomeNews\/\" \/>\n<meta property=\"article:published_time\" content=\"2024-04-02T15:33:37+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-04-02T16:21:15+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cdn.climatechangenews.com\/files\/2024\/03\/21171250\/Stephen-M.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"451\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Joe Lo\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@ClimateHome\" \/>\n<meta name=\"twitter:site\" content=\"@ClimateHome\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Joe Lo\" \/>\n\t<meta name=\"twitter:label2\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"7 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.climatechangenews.com\/2024\/04\/02\/zambias-fossil-fuel-subsidy-cuts-help-climate-and-kids-but-taxi-drivers-suffer\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.climatechangenews.com\/2024\/04\/02\/zambias-fossil-fuel-subsidy-cuts-help-climate-and-kids-but-taxi-drivers-suffer\/\"},\"author\":{\"name\":\"Joe Lo\",\"@id\":\"https:\/\/www.climatechangenews.com\/#\/schema\/person\/0728ee568424ff7aec7eae8cb9a27c3f\"},\"headline\":\"Zambia&#8217;s fossil-fuel subsidy cuts help climate and kids &#8211; 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