IMF COMPLETES FINAL REVIEW OF ZAMBIA’S ECF PROGRAMME, APPROVES USD190 MILLION DISBURSEMENT
The International Monetary Fund (IMF) Executive Board has completed the sixth and final review of Zambia’s 38-month Extended Credit Facility (ECF) Arrangement, marking the successful conclusion of a programme that has supported the country’s reform agenda to restore macroeconomic stability, build economic resilience, and promote sustainable and inclusive growth.
The completion of the review allows for an immediate disbursement of SDR 138.9 million (about US$190 million), bringing Zambia’s total disbursement under the programme to SDR 1,271.66 million (about US$1.7 billion) since the arrangement was approved on August 31, 2022.
The IMF says Zambia’s economy has shown resilience despite external and domestic shocks, but stresses that continued reforms remain essential to safeguard macroeconomic stability, as well as debt and fiscal sustainability.
With the programme now concluded, the policy focus in 2026 will be on maintaining fiscal discipline and policy credibility to consolidate the gains made.
According to the IMF, programme performance has been broadly satisfactory. All end-June 2025 quantitative performance criteria and indicative targets were met, except for targets on net international reserves and spending arrears clearance.
Eight out of nineteen structural benchmarks were met, with six completed with delays. The submission to Parliament of the revised Banking and Financial Services Act, aligned with international standards, satisfied a key prior action for the review.
The IMF also granted a waiver for missing the net international reserves target.
Zambia’s economic outlook remains positive. Real GDP growth is estimated at 5.2 percent in 2025, supported by strong mining activity and record-high maize production.
Growth is projected to rise to 5.8 percent in 2026, driven by improved electricity generation and continued strong performance in mining and services. Inflation is expected to gradually return to the 6–8 percent target band by 2027.
The IMF notes that Zambia’s public debt is now considered sustainable, although the country remains at high risk of overall and external debt distress. Progress has been made in external debt restructuring, with five bilateral agreements signed and discussions with commercial creditors ongoing. If fiscal consolidation continues as planned, Zambia is expected to move to a moderate risk of external debt distress over the medium term.
IMF Deputy Managing Director and Acting Chair Nigel Clarke commended Zambia for reducing macroeconomic imbalances, advancing debt restructuring, and maintaining fiscal consolidation while protecting social spending. He emphasized the need for continued prudent macroeconomic policies, stronger revenue mobilization, improved public financial management, and cautious borrowing.
The IMF also highlighted the importance of careful monetary policy to bring inflation back to target levels, rebuilding foreign reserves, maintaining exchange rate flexibility, and strengthening financial stability through reforms such as the review of the Banking and Financial Services Act and adoption of a deposit insurance scheme.
Governance and structural reforms, particularly in agriculture and the energy sector, were also cited as key to improving the business climate, encouraging private sector participation, and supporting economic diversification and climate resilience.
By Rachel Mumba
