IMF Reaches Staff-Level Agreement to Release $185.5 Million for Zambia
The Zambian government and the International Monetary Fund (IMF) have reached a staff-level agreement to disburse $185.5 million to Zambia, pending approval from IMF management and the executive board.
The agreement follows an IMF mission to Zambia from October 2-15, led by Mercedes Vera Martin, and subsequent discussions held in Washington.
The IMF highlighted the severe impact of recent drought conditions on Zambia’s agricultural output and electricity supply. Commenting on the government’s response, the IMF noted, “The authorities mobilized emergency relief for the most vulnerable populations while maintaining fiscal consolidation efforts to restore debt sustainability.”
Looking ahead, the IMF emphasized the importance of revenue mobilization and structural and governance reforms as essential to sustaining growth and protecting recent progress.
“Mobilizing revenues and stepping up reforms will help Zambia unlock growth and safeguard hard-earned gains,” the IMF stated.
Ms. Vera Martin outlined the economic outlook, noting challenges for 2024 but expressing a positive view for the medium term. “Growth in 2025 is projected at 6.2%, revised from 6.6%, as electricity output is not expected to fully recover.
This outlook is supported by a rebound in agriculture and mining, along with the completion of debt restructuring, prudent policies, and ongoing reforms,” she said.
She added that inflation is expected to align with target levels by late 2025 due to strong base effects. The external position is anticipated to improve with higher exports and foreign direct investment, which will help strengthen reserves.
This financial support from the IMF is a crucial component of Zambia’s strategy to stabilize and grow its economy amid challenging conditions.
