The International Monetary Fund (IMF) has completed the sixth and final review of Zambia’s Extended Credit Facility, approving an immediate disbursement of about USD 190 million and bringing total IMF support under the programme to about USD 1.7 billion.
The review concludes the 38-month Extended Credit Facility arrangement approved in August 2022, which supported Zambia’s reform programme focused on restoring macroeconomic stability, strengthening fiscal and debt sustainability, and promoting inclusive economic growth.
Following the Executive Board decision, Zambia will receive SDR 138.9 million, bringing total disbursements under the programme to SDR 1,271.66 million.
Program performance was assessed as broadly satisfactory, despite delays in some structural reforms.
All end-June 2025 quantitative performance criteria and indicative targets were met, except for targets related to net international reserves and the clearance of spending arrears.
Eight of nineteen structural benchmarks were met on time, with six others completed with delays.
The submission to Parliament of the revised Banking and Financial Services Act, aligned with international standards, fulfilled a prior action for the review.
The IMF Executive Board also approved a waiver for the non-observance of the net international reserves target.
The IMF expects Zambia’s economic outlook to remain positive. Real gross domestic product growth is estimated at 5.2% in 2025, driven by strong mining activity and record maize production.
Growth is projected to increase to 5.8% in 2026, supported by improved electricity generation and continued expansion in mining and services. Inflation is expected to gradually converge toward the 6–8% target range by 2027.
Public debt is assessed as sustainable but remains at high risk of external and overall debt distress, with external debt restructuring progressing through bilateral agreements with official creditors and ongoing negotiations with commercial creditors.
Zambia Macroeconomic Indicators and Outlook
| Indicator | 2021 | 2022 | 2023 | 2024 | 2025 (Est.) | 2026 (Proj.) | 2027 (Proj.) |
| GDP growth (%) | 6.2% | 5.2% | 5.4% | 3.8% | 5.2% | 5.8% | 6.0% |
| Inflation, annual average (%) | 22.0% | 11.0% | 10.9% | 15.0% | 14.0% | 9.3% | 7.5% |
| Inflation, end of year (%) | 16.4% | 9.9% | 13.1% | 16.7% | 11.0% | 8.2% | 7.0% |
| Public debt (% of GDP) | 112.1% | 110.9% | 133.4% | 101.8% | 87.6% | 78.3% | 68.5% |
| Fiscal balance, cash basis (% of GDP) | -8.1% | -7.8% | -5.5% | -3.5% | -4.6% | -2.8% | -2.0% |
| Current account (% of GDP) | 11.9% | 3.7% | -3.0% | -1.9% | -2.1% | 1.7% | 2.6% |
| Foreign direct investment (% of GDP) | 3.1% | 0.7% | 1.8% | 5.3% | 4.5% | 4.6% | 4.8% |
| Reserves (months of imports) | 3.3 | 3.4 | 3.3 | 3.7 | 4.0 | 3.9 | 4.2 |
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.
“Careful monetary policy calibration to gradually bring inflation toward the target band will be key to anchoring inflation expectations and preserving price stability. Rebuilding reserves buffers and sustaining exchange rate flexibility are important to enhance resilience to external shocks. The review of the Banking and Financial Services Act and the adoption of the deposit insurance scheme are welcome steps to strengthen financial stability.
“Governance and structural reforms remain vital for promoting private sector activity and supporting diversification and inclusive growth. The revised Agricultural Acts will enhance predictability and support private sector investment. Continued efforts to strengthen governance and enhance transparency in the energy sector will improve the business climate and support sustainable growth. Measures to enhance climate resilience are important to help to safeguard development gains.”
Zambia entered the Extended Credit Facility programme following a period of severe macroeconomic stress marked by high debt levels, limited fiscal space, and external financing constraints.
The programme formed part of Zambia’s broader efforts to stabilise the economy, restructure public debt, and restore investor confidence.
