IMF and Zambia Agree on US$1.47 Billion Successor Programme
IMF Reaches US$1.47 Billion Agreement with Zambia for Three-Year Economic Programme
The International Monetary Fund (IMF) and the Zambian Government have reached a staff-level agreement on a new 36-month Extended Credit Facility (ECF) worth approximately US$1.47 billion, aimed at maintaining economic stability, supporting budget and balance-of-payments needs, and promoting private-sector-led growth.
The agreement followed an IMF mission to Lusaka from September 29 to October 9, led by Mission Chief Edward Gemayel, who held discussions with President Hakainde Hichilema, Finance and National Planning Minister Situmbeko Musokotwane, Bank of Zambia Governor Denny Kalyalya and other government officials.
The proposed programme remains subject to approval by the IMF Executive Board and the implementation of agreed prior actions.
The new facility would build on Zambia’s previous IMF-supported programme, which concluded in January 2026 after six reviews and provided approximately US$1.7 billion in financing.
Gemayel said Zambia was entering the proposed programme from a stronger position following the progress achieved under the previous arrangement.
The IMF projected Zambia’s economy would grow by 5.6% in 2026, supported by agriculture, mining and exports.
Inflation declined to 6.1% in September, within the Bank of Zambia’s target range, while gross international reserves reached US$6.1 billion.
However, the Fund noted that lower-than-expected revenue collections and higher-than-budgeted expenditure had weakened the country’s fiscal position.
It welcomed corrective measures introduced by the government to address these pressures.
From 2027, the programme is expected to prioritise domestic revenue mobilisation, improved tax administration and stronger debt management, while protecting priority social spending.
The agreement also seeks to advance the government’s Grow Zambia Agenda through reforms aimed at encouraging private investment, expanding exports, diversifying the economy, creating jobs and increasing incomes.
Governance reforms will include strengthening anti-corruption institutions and improving transparency in mining licensing.
Debt sustainability remains a central priority as Zambia continues efforts to complete its debt restructuring process.
The IMF said discussions with the African Export-Import Bank were close to formalisation, while good-faith discussions were ongoing with the Trade and Development Bank.
Under the proposed three-year facility, financing would be disbursed in seven instalments, with payments scheduled approximately every six months.
The first instalment would account for about 15% of the total facility, subject to the programme’s approval and financing conditions.
The new arrangement would mark the next phase of Zambia’s engagement with the IMF, seeking to preserve the macroeconomic stability achieved under the previous programme while placing greater emphasis on investment, economic expansion and employment creation.
