IMF Injects US$ 569.6 Million into Zambia Following Board Approval of ECF Programme Review
The Executive Board of the International Monetary Fund (IMF) has approved the third review of Zambia’s 38-month Extended Credit Facility (ECF) Arrangement, resulting in an immediate disbursement of approximately US$ 569.6 million.
This decision includes the approval of Zambia’s request for an additional 30 percent of quota to help maintain macroeconomic stability and respond to external shocks, bringing Zambia’s total disbursement under the ECF-supported programme to approximately US$ 1.1 billion.
The ECF Arrangement, originally approved on August 31, 2022, for US$ 1.3 billion, has now increased to about US$ 1.7 billion. This funding supports Zambia’s Eighth National Development Plan, which aims to ensure macroeconomic stability, achieve debt and fiscal sustainability, enhance public governance, and foster inclusive growth.
Deputy Managing Director and Acting Chair of the IMF, Ms. Antoinette Sayeh, praised Zambia’s satisfactory performance under the ECF-supported arrangement. She highlighted the country’s stronger-than-expected fiscal and economic outcomes and progress on structural reforms.
However, she noted the significant impact of the drought on a substantial portion of the population and emphasized the importance of coordinated macroeconomic policies, continued efforts to restore fiscal and debt sustainability, and consistent reform implementation.
“Adhering to the committed fiscal consolidation over the programme period remains critical to ensure fiscal sustainability. Given the significant spending reprioritisation in 2024, focus should be put on revenue mobilisation, including enhancing tax administration and broadening the tax base,” said Ms. Sayeh.
She also stressed the importance of implementing financial management reforms to enhance spending controls, budget execution, and fiscal accountability.
Finance and National Planning Minister Dr Situmbeko Musokotwane expressed the Zambian Government’s gratitude for the IMF’s continued support, stating, “This is a testimony of the confidence that the IMF has in the strides we are making towards achieving the objectives of our home-grown reform agenda of not only restoring macroeconomic stability and fiscal and debt sustainability but also enhancing human development and improving the good governance environment.”
The IMF’s approval comes at a crucial time as Zambia faces significant challenges due to the drought, which has affected agriculture production and electricity generation. The Government anticipates that this financial support will boost investor confidence and enhance foreign direct investment.
Dr Musokotwane reiterated Zambia’s commitment to the reform process and expressed gratitude to the IMF for their commendation of the country’s effective planning in response to the drought.
He highlighted the importance of emergency relief activities targeted at the most vulnerable and the ongoing efforts in public financial management, fiscal control, and good governance to ensure debt sustainability and safeguard social spending.
The injection of IMF funds will not only strengthen Zambia’s economic reform strategy but also enhance the country’s economic resilience in the face of a challenging global economic environment.
