By zambianobserver
Africa-Press – Zambia. — By Dr. Situmbeko Musokotwane, MP
Minister of Finance and National Planning
The spine of the resolutions adopted at the 25th Cabinet Meeting represent a broad and coordinated economic package that spans cost-of-living interventions, decentralised infrastructure and energy development, development finance commitments, legislative and regulatory reforms, human capital investments, labour standards, system reliability, environmental sustainability, and disaster response mechanisms. I join the ongoing public debate to compliment the explanation by the Chief Government Spokesperson, Honourable Cornelius Mweetwa, MP, regarding what the resolutions adopted at the 25th Cabinet Meeting are designed to do, and why they matter to households, businesses, communities and investors alike.
I will look at the Cabinet resolutions from an economic perspective, mindful that they are not a mere collection of unrelated decisions, but enablers of an execution agenda that connects cost-of-living relief, energy security, decentralised development, private investment, labour standards, social protection, and institutional reform into one economic story. The purpose is simple but demanding: to help translate macroeconomic stability into outcomes that are felt in people’s daily lives, while strengthening the institutions that sustain growth over time.
The resolutions brought together a wide range of measures covering interventions aimed at addressing the rising cost of living, especially through fuel and food channels. Among the major steps is the expansion of infrastructure and energy development at the local level, so that electricity and services are not just available but also community-owned. The resolutions are clear commitments related to strengthening how development is financed, legislation and regulations are updated to meet modern trends, and how public services like healthcare and pensions, are improved. The resolutions will also address how we prepare for and responds to disasters, and how the country builds a more environmentally sustainable future.
All these areas are not being tackled in isolation but being treated as part of one joined-up plan. Together, the resolutions tell a single economic story. A story where different reforms work in sequence to reduce pressure on households, create opportunities for growth, and strengthen public trust in how national development is managed.
That story includes actions like reducing the impact of inflation by piloting a bulk fuel import system aimed at lowering prices and improving supply. The story involves stabilising energy provision by giving communities a formal stake in infrastructure through the Constituency Energy Benefit Trust. It advances human capital and better public service delivery through a revised National Health Policy with a new implementation plan. It also includes tightening labour protections by ratifying the International Labour Organization’s Forced Labour Protocol, which is increasingly seen by global markets as a non-negotiable standard.
Implementation of the Cabinet resolutions will also strengthen the resilience of rural and low-income households through timely payments to farmers and cash-based assistance in food-insecure districts.
Furthermore, the resolutions open the door to increased private investment in renewable energy by adopting a competitive and transparent framework for project selection. Related to the wider legal and regulatory environment, there will be modernization through updating laws associated with financial markets, climate finance, public revenue systems, fisheries, pensions, and electricity grid stability, to ensure these systems can support sustainable growth over time.
Constituency Energy Benefit Trust and Community Ownership under the Presidential Constituency Energy Initiative
One of the most significant governance reforms adopted by Cabinet addresses a longstanding question in decentralised infrastructure development: who owns the asset, who represents community interests, and how are benefits shared over time.
Cabinet approved the Constituency Energy Benefit Trust as the legal framework for owning, governing, and managing constituency-held equity in energy projects developed under the Presidential Constituency Energy Initiative. The equity will be held in trust by the Minister of Finance (CAP 349) strictly on behalf of each constituency, with governance arrangements designed to ensure local oversight, transparency, and participation. The Zambia National Energy Corporation Limited (ZNEC) is positioned as the Special Purpose Vehicle responsible for implementing the initiative and managing the assets on behalf of constituencies.
This structure assigns clear roles. Cabinet provided the mandate. The Ministries responsible for Energy, Local Government, and Finance will align financing, implementation, and governance. Local councils and constituency-level structures will act as the institutional face of ownership and approval. ZNEC will manage the equity and project delivery. Regulators will safeguard grid and market integrity. Private developers, EPC contractors, and financiers will deliver the infrastructure. Communities will participate formally through the Trust mechanism, rather than through informal or ad-hoc expectations.
Economically, the Trust is designed to convert energy projects from one-off construction activities into durable local economic instruments. Employment will be created during construction and ongoing maintenance, and once projects are operational, predictable income streams are expected to flow to constituencies through a structured and transparent benefit-sharing framework. The broader ambition of the Presidential Constituency Energy Initiative is to roll out 2-megawatt solar projects across Zambia’s constituencies over time, subject to project readiness and local alignment. The constituency energy projects are intended to strengthen energy supply while anchoring local resilience and ownership. In our view, this is a top-tier constituency empowerment masterpiece.
The objectives of the Eighth National Development Plan will be reinforced through the decentralised energy assets and treated as long-term economic infrastructure with clear ownership and governance parameters. Similarly, the 2026 Budget’s emphasis on fiscal consolidation will, among other programmes, be nurtured through constituency-level energy initiatives to be built on bankable structures aimed at reducing implementation risk and limiting fiscal slippages.
Competitive Procurement for Private-Sector Participation in Renewable Energy
The resolution on Competitive Procurement for Private-Sector Participation in Renewable Energy deals with how the country will attract private investment in renewable energy while also protecting the interests of consumers and the public. In simple terms, it is about how energy projects, like solar farms or mini-grids, are selected and financed. The goal is to make this process more open, fair, and bankable, tenets of what a conducive business environment is all about.
Cabinet, having approved the Competitive Procurement Framework, has facilitated the transition from ad-hoc negotiations or closed processes in selecting renewable energy projects, to a standardised and transparent method in choosing which projects get built, who builds them, and how they are financed. This economic governance improvement aspect is expected to reduce costs, improve quality, and make it easier for credible investors to bring in capital. It will also help to ensure that benefits from renewable energy investments like jobs and value chain participation, are substantially available to Zambian citizens.
The framework may include mechanisms for renewable energy liquidity and standard project agreements, designed to make projects more attractive to funders, by reducing financial risk and simplifying contracts. That means projects will be able to reach financial closure more quickly and start delivering electricity sooner for the benefit of economy.
Different players will have clearly defined roles under this framework. Cabinet has set the national policy direction. Sector ministries will translate that direction into a pipeline of actual projects. Procurement institutions and relevant rules will make sure the selection process is competitive and transparent. The regulator will set and enforce technical and pricing standards. ZESCO and other grid or system operators will be responsible for making sure the new projects connect safely to the grid. Private developers, engineering contractors, and financiers will contribute capital and execution capacity. Crucially, communities, particularly those where the energy infrastructure will be located, will be treated as active stakeholders, not passive observers.
Why Competitive Procurement is Economically Consequential
The shift to competitive procurement is not just about governance—it also has a direct economic impact. Across different parts of the world, countries that use open, rule-based bidding for renewable energy projects have seen electricity prices drop and investment rise. That is because competition tends to attract more credible bidders, lowers financing costs, and reduces the risk of rent-seeking, corruption or inefficiency.
According to the International Renewable Energy Agency (IRENA), renewable energy auctions are one of the most effective ways to procure clean energy at scale. They define the process as structured and competitive enough to enable credible renewable energy developers to bid to supply electricity. Research shows that, well-designed processes improve price transparency and allow governments to balance economic, social, and environmental goals in the energy sector.
On the governance side, the OECD has outlined a set of procurement principles that explain why transparent and competitive procurement works better than discretionary or negotiated deals. These principles—such as access, fairness, accountability, and risk management—help prevent misuse of public resources and encourage better long-term outcomes when public and private actors work together. As Zambia, we are aligned to this governance pattern and are ready to adopt best practice to improve our implementation efficiency.
System Reliability as the Guardrail
While competitive procurement will bring in more renewable energy, it may also scale-up the demand for effective and properly choreographed management of the national electricity grid. Unlike traditional energy sources, renewables like solar and wind are variable as they do not generate power consistently throughout the day or year. This means the grid must be prepared to absorb these fluctuations without compromising reliability.
Cabinet’s approach recognises this risk. That is why system reliability is being treated as a non-negotiable requirement. Europe’s experience offers a useful example. The European Network of Transmission System Operators (ENTSO-E) developed a regulatory framework called “Requirements for Generators.” This framework sets consistent rules across countries to ensure that new energy projects don’t destabilise the grid. These standards have been codified in EU law and are now widely accepted across the European continent.
By adopting a similar line of thought, Zambia will scale-up renewable energy investment while also maintaining a secure and reliable energy system. The Competitive Procurement Framework is therefore not just about price and competition, it is also about aligning procurement with the technical realities of a modern, evolving energy grid.
The bigger picture is clear: Zambia’s 8th National Development Plan (8NDP), which prioritises private-sector-led growth and climate-resilient infrastructure, becomes more actionable when the renewable energy sector is structured around open competition, strong rules, and bankable financing tools. Likewise, the 2026 Budget’s focus on fiscal consolidation will be better supported because private capital will be used to finance energy investments, rather than relying on public borrowing or subsidies that strain national finances.
Legislative and Regulatory Reforms
This resolution deals with modernising the legal and regulatory frameworks that govern key parts of our economy. These updates are not just technical, they’re about building trust in the rules that underpin investment, environmental stewardship, and social protection.
The aim is to consolidate what could be described as the “rules of the game”, that is, the regulatory environment in which capital is invested, services are delivered, resources are managed, and citizens interact with the state. Cabinet approved a legislative package that includes the 2025 Securities Bill, new Carbon Market Regulations, revised Citizenship Regulations (particularly on fee structures), Fisheries Reserves Regulations, updates to the National Pension Scheme Regulations, and an Electricity Grid Code Amendment. The grid code amendment, in particular, is designed to ensure that Zambia’s power system remains stable as more renewable energy is added.
Various institutions have different roles to play. Cabinet has set the overall reform direction. Line ministries and regulators will be responsible for developing, consulting on, and implementing the relevant regulations. In the capital markets, the securities regulator, stock exchanges, intermediaries, issuers, and investors take the updated legal framework and turn it into new investment flows. In the carbon market space, project developers, registries, auditors, community structures, and benefit-sharing vehicles will use the new rules to deliver bankable, environmentally sound carbon credits. Meanwhile, citizens and firms, as end-users, will benefit from clearer, more predictable rules, stronger protections for savings, cleaner investment flows, and more efficient public services.
Securities and Capital Market Modernisation
Capital markets play a vital role in any economy by enabling savings to be turned into productive investment. However, this only works well if the legal and regulatory environment is modern, credible, and fair. The new Securities Bill matters because, once legislation is enacted, it will provide the necessary foundation and deepen Zambia’s capital markets, reduce over-reliance on bank lending, and expand the range of financing options available to the private sector. A more robust capital market will mean more pathways for the Government and companies to raise money without excessive borrowing from abroad.
The global reference for these types of reforms is IOSCO—the International Organization of Securities Commissions. IOSCO’s core objectives include protecting investors, ensuring that markets are fair, efficient, and transparent, and reducing systemic risk. These are the outcomes that Zambia’s reform initiative aims to achieve.
Carbon Markets and Integrity
Carbon markets have the potential to unlock large-scale financing for climate projects, especially in sectors like forestry, clean cooking, and renewable energy. But this opportunity only delivers value if the carbon credits being sold are real, measurable, and independently verified, and if community benefits are clearly protected. In Cabinet, our approval of new Carbon Market Regulations was anchored on the recognition of this reality. The goal is now to ensure that our country builds a credible carbon market framework, one that attracts international climate finance while protecting the rights and interests of local communities.
The Integrity Council for the Voluntary Carbon Market has developed a set of Core Carbon Principles. These provide a global benchmark for high-quality carbon credits. Similarly, the UNDP’s High-Integrity Carbon Markets Toolkit highlights the importance of accountability, safeguards, and fair benefit sharing. Zambia’s new rules are designed to reflect this international thinking, ensuring that carbon finance is not just a revenue stream but a tool for inclusive and sustainable development.
Fees, Services, and Fiscal Sustainability
Adjustments to fees for services such as citizenship applications and other administrative processes are often sensitive matters because they affect people directly and immediately. The Government is determined to ensure that they are handled properly so as not to undermine trust, discourage investment, or create the perception of arbitrariness. Cabinet recognises that fees must strike a careful balance between sustaining public services and maintaining access, fairness, and predictability.
The underlying principle guiding the fees adjustments is clarity. The fees will be clearly communicated, consistently applied, and aligned with the actual cost and quality of service delivery. In making the decision, we considered that when citizens and investors are able to anticipate costs in advance, fees stop being hidden frictions and instead become part of a transparent and rules-based public service environment.
Fisheries
The declaration of fisheries reserves reflects a long-term approach to protecting the natural resource base that supports inland fishing communities. Over time, unsustainable fishing practices threaten not only fish stocks but also food security, household incomes, and local economies. By prioritising sustainability, the Government is seeking to ensure that fisheries remain productive for future generations and to preserve that community income-stream, rather than being depleted for short-term gain.
Pensions
Updates to pension regulations will serve a long-term purpose. While they may attract less public attention, we consider pension systems as a critical pillar of social and economic stability. Through strong regulation, the pensions industry will be helped to protect the real value of retirement savings, particularly in periods of inflation or economic uncertainty. Pensions are important because they help to stabilise household consumption and local demand, thereby making them an significant component of economic resilience.
Health System Strengthening
The approval of the Revised National Health Policy and its 2025–2029 implementation plan reflects an understanding that health outcomes and economic outcomes are closely linked. A health system that prevents illness and responds effectively to emergencies reduces the number of workdays lost, lowers household vulnerability to sudden health-related expenses, and improves the overall productivity of the labour force and of the economy.
This policy decision therefore goes beyond service delivery. It is an investment in human capital and long-term economic performance. When preventable illnesses are reduced, households are less likely to fall into distress spending, and the economy benefits from a healthier, more stable workforce. While improvements will be realised in due course, the policy sets a clear framework for strengthening health systems in a way that supports both social wellbeing and economic resilience.
Labour Standards
Cabinet’s approval to ratify the ILO Protocol on Forced Labour strengthens Zambia’s labour protection framework at a time when global markets increasingly demand high standards of due diligence. International buyers, investors, and sourcing platforms now treat labour compliance as a baseline requirement rather than a discretionary consideration.
The protocol focuses on prevention, victim protection, stronger labour inspection, and fair practices. By aligning domestic standards with international norms, Zambia improves its ability to participate competitively in global value chains while reinforcing protections for workers. This decision therefore supports both social justice and economic competitiveness.
Bulk Importation of Petroleum
The decision to pilot bulk importation of petrol should be understood as a targeted cost-management intervention operating firmly within Zambia’s established market reform trajectory. It responds to scale inefficiencies, financing costs, and supply volatility in a fuel market that remains one of the fastest transmission channels for inflation, while preserving competition, private investment incentives, and regulatory discipline.
Zambia’s historically fragmented petrol import model has constrained bargaining power, raised logistics and financing costs, and increased exposure to supply disruptions, with rapid pass-through effects to transport costs, food prices, and industrial inputs. Aggregating national demand through a structured procurement process improves pricing leverage, smooths cargo planning, strengthens supply certainty, and reduces exposure to external shocks. Crucially, the Cabinet-approved measure is not a return to state trading. It is a time-bound, auditable procurement mechanism designed to stabilise a strategically sensitive input while longer-term market efficiencies continue to deepen.
The four-month pilot pools demand through a clearly defined, market-based procurement process without displacing private-sector participation. Aggregation is intended to improve international purchase terms, reduce per-unit landed costs, and enhance logistics and storage efficiency, while preserving open competition among suppliers. Implementation will follow a limited but competitive bidding process in line with public procurement rules, reflecting the pilot’s time-bound stabilisation objective rather than a structural shift in market design.
Transparency is a core design feature of the pilot. Procurement outcomes, landed costs, supply reliability, and compliance with procurement and regulatory rules will be disclosed, ensuring that any decision on continuation or scale-up is based strictly on verifiable performance data rather than discretion or policy drift.
Importantly, the Bulk Importation Pilot will operate alongside, and not in substitution of, the Open Access Initiative governing the existing petroleum infrastructure. Open Access remains the core structural reform through which Zambia has liberalised infrastructure access, deepened competition, and positioned the Government as regulator rather than market participant, particularly in relation to Tazama pipeline and depot systems. The pilot is explicitly designed to remain compatible with Open Access principles, including non-exclusivity, transparency, predictability, and contestability, ensuring that infrastructure access remains open and competitive even as procurement is temporarily coordinated.
Within Zambia’s liberalised petroleum market structure, retail petroleum prices continue to be guided by a regulated pricing framework administered by the Energy Regulation Board (ERB). Pump prices are determined through a transparent, cost-reflective template incorporating import parity costs, exchange-rate movements, statutory taxes and levies, and approved distribution and retail margins. The Bulk Importation Pilot does not alter the ERB’s mandate or introduce discretionary price controls. Instead, it operates upstream by lowering underlying cost components that feed into the ERB pricing model, easing inflationary pressure at source while preserving predictability and regulatory credibility at the pump.
From a governance perspective, Cabinet has set a policy direction and approved the pilot; the Ministry responsible for energy policy will coordinate implementation; the ERB will provide regulatory oversight; procurement institutions will safeguard competitive tendering and integrity; Eligible Oil Marketing Companies and logistics providers will deliver importation, storage, and distribution; and public finance and monetary authorities will monitor interactions with foreign exchange management, liquidity, and inflation dynamics. The intervention is therefore not confined to import logistics alone, but constitutes a broader exercise in market coordination, institutional discipline, and policy execution.
International experience shows that when pooled procurement is well governed, it can reduce inflation pass-through without undermining competition. Evidence from both advanced and emerging economies demonstrates that outcomes depend less on aggregation itself than on procurement design, sequencing, transparency, and accountability. Zambia’s approach deliberately treats the pilot as a learning exercise, anchored in disclosure, monitoring, and evidence-based refinement rather than policy reversal.
Taken together, the Bulk Importation Pilot and the Open Access Initiative reflect a pragmatic sequencing of reform: coordination where market failure is acute, competition where markets function effectively, and regulation that is credible and predictable. For households, the intervention targets one of the fastest channels through which global price shocks affect the cost of living. For investors and development partners, it signals continuity, institutional maturity, and a commitment to reducing inflationary pressures without retreating from liberalisation or private-sector-led market principles.
Development Finance and Regional Credibility
Cabinet approved Zambia’s contribution to the Seventeenth Replenishment of the African Development Fund, the concessional financing arm of the African Development Bank Group. The ADF supports sectors such as energy, infrastructure, governance, regional integration, and climate resilience through low-cost, long-term financing.
Zambia’s contribution reflects its role as an active and credible partner in Africa’s development financing architecture. Domestically, it will help preserve access to affordable finance for productivity-enhancing investments that protect fiscal space. Regionally, it will strengthen collective capacity to finance development priorities at scale.
The Ministry of Finance and National Planning will anchor Zambia’s engagement in the replenishment process, while the ADF mobilises partner resources and channels them into projects that translate into physical infrastructure, public services, and employment.
Closing Synthesis
Taken individually, each Cabinet resolution is defensible. Viewed together, they form a coherent execution agenda aligned with the core logic of the Eighth National Development Plan: private-sector-led growth, decentralisation, climate-resilient infrastructure, and stronger institutions.
The 2026 Budget’s emphasis on consolidation and resilience is most likely to be realised when these policy levers operate in tandem. Fuel market reforms will help ease inflationary pressure. Community-anchored energy assets will broaden participation and local incomes. Competitive, rules-based procurement will crowd-in private capital while protecting system reliability. Legislative and regulatory modernisation will strengthen investor confidence, climate finance integrity, and social stability. Development finance commitments will sustain long-term investment capacity on affordable terms.
Viewed as a whole, the Cabinet resolutions form a coherent economic spine. They will reduce costs where inflation bites hardest, strengthen system reliability, embed communities as infrastructure stakeholders, reinforce access to concessional finance, modernise markets, and improve governance institutions.
Private-sector participation, particularly through competitive and transparent procurement in renewable energy, has now been positioned as a delivery mechanism rather than an end in itself. It will complement regulatory oversight, fiscal discipline, and public accountability.
Consistent with the 2026 National Budget, these resolutions are intended to translate macroeconomic stability into execution. If implemented with discipline and integrity, they will support job creation, strengthen household wellbeing, enhance energy security, and lay durable institutional foundations for sustained national prosperity.
Source: The Zambian Observer – The Zambian Observer
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