Zambia awarded an emergency $400 million contract to Vitol Group for fuel supply without a competitive tender, raising concerns from the International Monetary Fund (IMF). The deal for 50,000 metric tons of gasoline and diesel was made quickly despite the IMF previously recommending transparent procurement processes for emergency contracts, including public justifications and audits.
The Finance Minister, Situmbeko Musokotwane, defended the decision, stating that the government had to act quickly to secure fuel due to the Iran-Israel conflict disrupting global supplies. He indicated that the normal procurement process would have taken too long and risked fuel shortages. He also mentioned that the government was prioritizing ensuring a stable fuel supply over strict adherence to tender rules in this exceptional circumstance.
The financing for the emergency fuel purchase will come from the national budget, diverting funds that could have been used for other essential services. This move comes as Zambia is already facing a projected revenue loss of $200 million due to the suspension of fuel taxes to mitigate price increases for consumers. The southern African nation relies heavily on fuel imports and is particularly vulnerable to global price shocks.
