VIEWPOINT | IMF Wraps Up Zambia Programme, Unlocks Final USD190 Million: What It Means
The International Monetary Fund has closed the books on Zambia’s 38-month Extended Credit Facility programme, approving a final disbursement of about USD190 million and bringing total IMF support under the arrangement to roughly USD1.7 billion since August 2022. For markets, policymakers, and creditors, the signal is clear: Zambia has completed a difficult stabilisation chapter, but the discipline phase is only beginning.
The IMF’s Executive Board says Zambia’s performance under the programme was broadly satisfactory, despite operating in a tough environment marked by drought, global tightening financial conditions, and lingering debt pressures. Most of the programme’s quantitative targets were met, with shortfalls recorded only on net international reserves and the pace of clearing spending arrears. Structural reforms progressed more slowly, but key milestones were delivered, including submission to Parliament of a revised Banking and Financial Services Act aligned with international standards. That reform was treated as a prior action for the final review.
From a macro perspective, the Fund paints a relatively upbeat picture. Economic growth is estimated at 5.2 percent in 2025, driven by strong mining output and record maize production, and is projected to accelerate to 5.8 percent in 2026 as electricity generation improves and services remain robust. Inflation, which has been elevated in recent years, is expected to ease gradually and return to the 6–8 percent target band by 2027, provided policy discipline holds.
Debt remains the central risk. The IMF now classifies Zambia’s public debt as sustainable, but still places the country at high risk of overall and external debt distress. Progress on restructuring has been made, with five bilateral agreements signed and talks with commercial creditors continuing. The Fund’s message is conditional: if fiscal consolidation stays on track and borrowing remains cautious, Zambia could move to a moderate external debt risk over the medium term. Any slippage would reverse that trajectory quickly.
Fiscal policy is where the IMF wants continuity. With the programme concluded, the focus for 2026 shifts to maintaining credibility. That means sticking to budget discipline, strengthening domestic revenue mobilisation, improving public financial management, and protecting social spending. The IMF is explicit that reform fatigue now would undermine hard-won gains.
On the monetary side, the Fund urges caution and consistency. Inflation control remains a priority, alongside rebuilding foreign exchange reserves and preserving exchange rate flexibility. Financial sector stability is another watch point, with reforms such as a deposit insurance scheme and updated banking legislation expected to reduce systemic risks.
Beyond macro numbers, governance and sector reforms matter for growth quality. The IMF singles out agriculture and energy as critical bottlenecks and opportunities. Better policy frameworks in these sectors are seen as essential for improving the business climate, crowding in private investment, and supporting diversification and climate resilience.
For investors, the completion of the ECF removes a major layer of uncertainty and reinforces Zambia’s re-entry into orthodox macro management. For government, it narrows the room for policy missteps. The IMF cheque is not a victory lap; it is a bridge. What comes next depends on whether Zambia treats the end of the programme as a finish line, or as the baseline for governing without IMF guardrails.
© The People’s Brief | Ollus R. Ndomu