IMF Approves $184M for Zambia as Economic Recovery Gains Momentum
The International Monetary Fund (IMF) Executive Board has approved the fifth review of Zambia’s 38-month Extended Credit Facility (ECF), unlocking an immediate disbursement of SDR 139.88 million (approximately US$184 million). This brings Zambia’s total drawdown under the program to SDR 1.13 billion (about US$1.55 billion).
The ECF-supported program, launched in August 2022, aims to restore macroeconomic stability, ensure debt sustainability, and promote inclusive growth. The IMF noted that Zambia’s performance under the program has been “broadly satisfactory,” with all end-2024 quantitative targets and most end-March 2025 goals achieved.
While Zambia missed three indicative targets, on non-mining tax revenue, arrears clearance, and reserves, six out of 14 structural benchmarks were fully met, and four others completed with delays. The remaining four have been rescheduled for the next review.
The IMF granted a waiver for Zambia’s breach of a continuous performance criterion on non-concessional debt contracted in Q4 2024. The government’s adoption of the amended 2025 national budget was recognized as meeting a prior condition for the current disbursement.
Zambia’s economic recovery is gaining traction following the severe 2024 drought. Real GDP growth is estimated at 4% in 2024 and projected to rise to 5.8% in 2025, driven by renewed activity in agriculture, mining, and services. Inflation is expected to decline to 11% by year-end 2025.
The IMF highlighted the importance of scaling up mining investment, maintaining fiscal discipline, and accelerating governance and structural reforms, especially in the energy sector, anti-corruption, and agriculture, to ensure resilience and sustainable development.
Despite being at high risk of debt distress in the near term, Zambia’s public debt remains sustainable, with medium-term prospects expected to improve. Progress continues in negotiations with bilateral and commercial creditors to finalize debt restructuring agreements.
In a statement, IMF First Deputy Managing Director Gita Gopinath commended Zambia’s economic stabilization efforts. “Agricultural, mining and services activity has rebounded strongly. Program performance remains broadly satisfactory,” she said. “Governance and structural reforms remain vital for promoting private sector activity, economic diversification, and inclusive growth.”
The staff report for this review will be published on the IMF website, subject to Zambian authorities’ consent.
