IMF Exit Moment: Support Secured, Responsibility Deepens
The IMF’s staff-level agreement with Zambia, unlocking a prospective US$190 million disbursement, marks a critical closure point in the country’s Extended Credit Facility (ECF) programme.
As the sixth and final review comes to minds, it also signals that Zambia has broadly met agreed macroeconomic and structural benchmarks, reinforcing policy credibility at a sensitive juncture.
From a macroeconomic standpoint, the immediate value of this disbursement lies in liquidity support and reserve reinforcement.
With persistent external pressures from import demand to debt service obligations the additional inflow helps stabilise the balance of payments and cushions short-term foreign exchange volatility. This is particularly important as Zambia transitions from programme compliance to post-programme discipline.
More strategically, the agreement sends a strong confidence signal to markets and cooperating partners.
Completing the final review strengthens Zambia’s reform narrative around fiscal consolidation, expenditure rationalisation and revenue mobilisation, while anchoring expectations that policy slippages will be contained even beyond IMF oversight.
However, this credibility dividend can lower risk premia and support re-engagement with private capital over time.
Moreover, the end of the programme also raises the stakes. Without the IMF’s periodic conditionality, the onus shifts squarely to domestic institutions to sustain reforms, manage election-cycle pressures, and deepen structural changes particularly in SOE governance, public financial management and debt transparency.
The disbursement should therefore be viewed not as fiscal space for expansion, but as breathing room to lock in key policy reforms.
In sum, the staff-level agreement is both a vote of confidence and a true test of maturity. Zambia’s challenge now is to convert programme completion into durable macroeconomic stability, inclusive growth, and restored investor trust without the IMF as a constant backstop.
