IMF Approves $184 Million for Zambia Amid Economic Reforms

The International Monetary Fund (IMF) has completed the fourth review of the Extended Credit Facility (ECF), unlocking an immediate distribution of $184 million. This brings total disbursements under the program to $1.3 billion since its approval in 2022.

The government has demonstrated consistent performance under the programme, meeting most of its 2024 targets despite challenges from the historic drought that has impacted agriculture and energy production, slowing growth to an estimated 1.2%. Inflation has risen due to higher food prices and currency devaluation, but authorities are maintaining a focus on fiscal and debt sustainability while supporting vulnerable households.

Key measures include fiscal consolidation, tax base expansion, and enhancing transparency in state-owned enterprises. Reforms in governance, energy, and agriculture are also advancing to improve private sector growth and economic resilience. While Zambia’s debt remains at high risk of distress, restructuring efforts and agreements with creditors provide a path to moderate risk over the medium term.

IMF Deputy Managing Director Nigel Clarke emphasised the importance of fiscal and monetary policies, alongside structural reforms, to ensure economic stability and inclusive growth. These measures align with Zambia’s broader goals of improving governance and building resilience against future shocks.

This financial help highlights international confidence in Zambia’s reform path, which is vital to addressing debt challenges and supporting sustainable development.