The Executive Board of the International Monetary Fund (IMF) has completed the fifth review of Zambia’s 38-month Extended Credit Facility (ECF) Arrangement, following its Article IV consultation and financing assurances review. This decision enables an immediate disbursement of SDR 139.88 million (approximately US$184 million), raising total disbursements under the ECF-supported program to SDR 1132.74 million (about US$1.55 billion). The ECF program is intended to reinforce macroeconomic stability, restore debt and fiscal sustainability, improve public governance, and promote inclusive growth in Zambia.
According to the IMF, Zambia’s performance under the program has been broadly satisfactory. All quantitative targets for end-December 2024 and most indicative targets for end-March 2025 were achieved, though three indicative targets related to non-mining tax revenues, arrears clearance, and reserve accumulation were missed. Of fourteen structural benchmarks reviewed, six were met on time while four were completed with delays; the remaining four are proposed to be reset for future evaluation.
Zambia’s economy is projected to grow by 4 percent in 2024 as drought effects recede and by 5.8 percent in 2025 due to recovery in agriculture and continued mining sector strength. Headline inflation is expected to fall gradually, reaching about 11 percent by the end of next year. However, risks remain due to global uncertainties. Continued progress will depend on increased mining investment, sustained fiscal discipline, and reforms that encourage private sector development.
Despite these positive trends, Zambia remains at high risk of overall and external debt distress but has reached agreements in principle with most external commercial creditors and continues negotiations with official bilateral creditors.
The IMF Staff Report prepared for this consultation will be published soon on its official website: https://www.imf.org/en/Countries/ZMB.
During their assessment, Executive Directors expressed agreement with staff appraisal regarding Zambia’s economic progress:
"Executive Directors agreed with the thrust of the staff appraisal. They welcomed Zambia’s solid growth performance and broadly satisfactory performance under the ECF-supported program, and positively noted that economic conditions are starting to stabilize. Given downside risks, however, Directors stressed the need for sustained reform momentum to bolster debt sustainability and to foster private sector led, inclusive growth through ambitious structural reforms."
Directors emphasized that revenue-led fiscal consolidation is crucial for addressing Zambia's challenges:
"Directors underscored the importance of revenue-led fiscal consolidation to address Zambia’s fiscal and growth challenges. They welcomed new revenue measures and spending reprioritization introduced in the revised 2025 budget, and called for intensified domestic revenue mobilization efforts over the medium term to create space for priority social and capital spending while strengthening debt sustainability. Broadening the tax base and improving tax administration remain important in this regard. Directors encouraged further efforts to strengthen public financial management to help improve the efficiency, transparency, and credibility of fiscal operations. They emphasized the need for sustained budget discipline ahead of the 2026 elections."
On external debt restructuring:
"Directors welcomed the authorities’ good progress on external commercial and official debt restructuring, thereby reducing the risk of debt distress and contributing to the restoration of debt sustainability. They encouraged the authorities to sustain efforts to finalize all restructuring agreements promptly."
Regarding monetary policy:
"Directors concurred that the Bank of Zambia (BOZ) should maintain an appropriately tight monetary-policy stance to combat inflation. They supported BOZ’s data-driven approach to policy decisions while also emphasizing...the need...to further strengthen monetary policy transmission...They supported efforts...to strengthen liquidity operations...and underscored...reserve accumulation...and exchange rate flexibility..."
Structural reforms were also highlighted:
"Directors stressed that structural reforms remain vital for stimulating private sector activity...They highlighted improving business environment,...raising labor productivity,...reforming agricultural support mechanisms,...addressing informality,...infrastructure gaps,...limited access to finance....Directors underscored strengthening governance,...adopting Anti-Corruption Act,...strengthening independence Anti-Corruption Commission....enhanced transparency energy sector..."
Zambia’s main exports continue being copper—primarily shipped http://www.IMF.org/external/np/sec/misc/qualifiers.htm">to China—with a population estimated at around 21 million in 2024; per capita GDP stands at $1,246 according to recent estimates from Zambian authorities alongside IMF projections.
It is expected that discussions between IMF staff and Zambian officials will continue as part of regular consultations related http://www.IMF.org/external/np/sec/misc/qualifiers.htm">to countries with ongoing Fund arrangements.