Zambia to Open Talks on New IMF Programme After August Elections
Zambia to Begin New IMF Programme Negotiations After August Vote as Post-Default Reforms Continue
Zambia will begin negotiations on a new economic programme with the International Monetary Fund (IMF), but a final agreement is expected only after the country’s August general elections.
Finance Minister Situmbeko Musokotwane said discussions would commence “almost immediately,” offering the clearest timeline yet from Lusaka.
However, he indicated that the IMF prefers to conclude agreements with administrations that have a full electoral mandate to implement reforms.
“The IMF would like to negotiate with a government that has time to implement what has been negotiated,” Musokotwane said, signalling that the programme will likely be formalised once a new government is in place.
Transitioning from Crisis to Recovery
Zambia’s previous IMF arrangement a $1.7 billion Extended Credit Facility approved in 2022 expired in January. The programme supported the country through a complex debt restructuring following its 2020 sovereign default, the first by an African country during the pandemic era.
The IMF recently completed the sixth and final review of that facility, unlocking an additional $190 million in funding. While Lusaka initially considered extending the programme by a year to access an extra $145 million, it opted instead to pursue a new agreement tailored to a stabilising economy and longer-term development objectives.
President Hakainde Hichilema, elected in 2021 and seeking a second term in August, secured the IMF deal shortly after taking office.
His administration implemented fiscal consolidation measures and restored a measure of investor confidence following the default.
Musokotwane has reiterated that fiscal discipline will remain in place even during the interim period between IMF programmes.
Copper Boost and Fiscal Pressures
Zambia’s near-term outlook is being supported by higher copper prices and rising output. Copper accounts for more than 70% of the country’s export earnings, and the current rally is expected to strengthen government revenues.
However, fiscal pressures persist. A recent constitutional amendment increased the number of parliamentary constituencies, raising public expenditure in an election year. Musokotwane confirmed that a supplementary budget will be required to cover the additional costs.
Focus of the Next Programme
With macroeconomic conditions stabilising, Zambia’s next IMF programme is expected to shift emphasis from crisis management to growth and structural reform. Key priorities are likely to include:
-Expanding job creation
-Accelerating economic growth
-Maintaining fiscal consolidation
-Deepening post-debt restructuring reforms
Formal negotiations are set to begin soon, but the final contours of the agreement will depend on the outcome of the August elections and the government tasked with implementing the next phase of Zambia’s economic reform agenda.
