The International Monetary Fund (IMF) Executive Board has completed the Article IV Consultation and fifth review of Zambia's 38-month Extended Credit Facility (ECF) Arrangement. This arrangement, approved on August 31, 2022, aims to stabilize Zambia's macroeconomic environment, restore debt and fiscal sustainability, enhance public governance, and promote inclusive growth.
As a result of this review completion, an immediate disbursement of SDR 139.88 million (approximately US$184 million) is now available to Zambia. This brings the total disbursement under the ECF-supported program to SDR 1132.74 million (about US$1.55 billion).
Program performance was broadly satisfactory with most targets met by December 2024 and March 2025. However, some targets related to non-mining tax revenues, arrears clearance, and reserve accumulation were missed. Additionally, six out of fourteen structural benchmarks were achieved; four were completed with delays while the remaining four are set for the next review.
Zambia's economic outlook remains positive as effects from a historic drought diminish. Real GDP growth is estimated at 4 percent in 2024 and projected at 5.8 percent in 2025 due to improvements in mining and services sectors along with agricultural recovery.
Despite progress, Zambia's public debt poses high risks of distress though it is assessed as sustainable over the medium term. Agreements have been reached with most external commercial creditors while efforts continue towards bilateral agreements.
Following these developments, Gita Gopinath, First Deputy Managing Director and Chair of the Board stated: “Economic policies have helped stabilize Zambia’s economy... Agricultural, mining and services activity has rebounded strongly... Program performance remains broadly satisfactory.”
She emphasized that fiscal consolidation alongside prudent monetary policy are essential for stability: “Fiscal consolidation...and sound financial policies remain crucial for safeguarding macro-financial stability.” Governance reforms also play a vital role: “Governance and structural reforms remain vital for promoting private sector activity... Enhancing transparency... will help improve business climate.”
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