- The IMF Executive Board completed the sixth and final review under the 38-month Extended Credit Facility Arrangement, which has supported Zambia’s reform agenda aimed at restoring macroeconomic stability, building economic resilience, and promoting sustainable and inclusive growth.
- Zambia’s economy has shown economic strength amid external and domestic shocks. Continued reforms are essential to safeguard macroeconomic stability, and debt and fiscal sustainability.
- With the ECF arrangement having been successfully completed, policy focus in 2026 remains on maintaining fiscal discipline and policy credibility to consolidate the hard-earned gains.
Washington, DC: The Executive Board of the International Monetary Fund (IMF) completed today the sixth and final review of Zambia’s 38-month Extended Credit Facility (ECF) Arrangement, approved on August 31, 2022. The completion of this review allows for an immediate disbursement of SDR 138.9 million (about US$190 million), bringing Zambia’s total disbursement under the ECF-supported program to SDR 1,271.66 million (about US$1.7 billion).
Program performance has been broadly satisfactory, albeit with some delays on structural conditionality. All end-June 2025 quantitative performance criteria (QPC) and indicative targets (ITs) were met, except for the QPC on net international reserves and the IT on spending arrears clearance. Eight out of nineteen structural benchmarks (SBs) were met, and six additional SBs were completed with delays. The submission to Parliament of the revised Banking and Financial Services Act (BFSA), broadly aligned with international standards, satisfied the prior action set for this review. The Executive Board also granted a waiver for the nonobservance of the QPC on net international reserves at end-June 2025.
Zambia’s economic outlook remains positive. Real GDP growth is estimated at 5.2 percent in 2025, underpinned by strong mining activities and record-high maize production. Real GDP growth in 2026 is projected at 5.8 percent on the back of continued recovery in electricity generation and strong performance in mining and services. Inflation is projected to converge gradually toward the 6-8 percent target band by 2027. Notwithstanding heightened global uncertainty, the medium-term outlook remains favorable and hinges on scaling up mining investment, robust agriculture production, improved electricity generation, and sustained fiscal discipline. Continued efforts are needed to promote private sector participation, economic diversification, and more inclusive growth.
Zambia’s public debt is assessed as sustainable but remains at high risk of overall and external debt distress. External debt restructuring continues to advance as five bilateral agreements with official creditors have been signed, and progress with commercial creditors is advancing. Provided that the authorities maintain the projected fiscal consolidation path, Zambia is expected to reach a moderate risk of external debt distress over the medium term.
Following the Executive Board discussion on Zambia, Mr. Nigel Clarke, Deputy Managing Director and Acting Chair, issued the following statement:
“Despite external and domestic shocks, Zambia has significantly reduced macroeconomic imbalances, made considerable progress on debt restructuring, and undertaken sustained fiscal consolidation while safeguarding social spending. The performance under the program has been broadly satisfactory and the authorities should remain focused on maintaining prudent macroeconomic policies and advancing reforms to foster inclusive and private-sector-led growth. Continued engagement with the Fund and development partners would support these policy endeavors.
“Fiscal performance in 2025 remained strong. Fiscal consolidation driven by revenue mobilization remains essential to consolidate macroeconomic gains, while protecting social spending, and create fiscal space to meet development needs. The authorities’ focus on strengthening revenue mobilization and enhancing public financial management is appropriate. Prudent borrowing and further progress on debt restructuring are necessary to ensure debt sustainability.
REA MORE: https://www.imf.org/en/news/articles/2026/01/27/pr-26024-zambia-imf-executive-board-completes-sixth-review-under-the-extended-credit-facility
