IMF Reaches Staff-Level Agreement on Final ECF Review for Zambia, $190m Disbursement Expected
The International Monetary Fund (IMF) has reached a staff-level agreement with the Zambian authorities to complete the sixth and final review under the country’s 38-month Extended Credit Facility (ECF) arrangement, paving the way for a further disbursement of about US$190 million, subject to Executive Board approval.
An IMF mission led by Ms. Mercedes Vera Martin, Mission Chief for Zambia, visited Lusaka from October 22 to November 4, 2025, with follow-up discussions held virtually from Washington D.C.
If approved by the IMF Executive Board, the disbursement of SDR 138.9 million would bring Zambia’s total receipts under the programme to SDR 1.27 billion (about US$1.7 billion) since August 2022.
“We are pleased to announce that IMF staff and Zambian authorities have reached a staff-level agreement on policies to complete the Sixth and final Review of Zambia’s 38-month ECF arrangement,” Ms. Vera Martin said in a statement.
She noted that despite facing both external and domestic shocks during the programme period, Zambia has made significant progress in restoring macroeconomic stability, reducing imbalances, and advancing its debt restructuring process.
“Zambia has significantly reduced macroeconomic imbalances, reached agreement on most of the external debt under the perimeter of the debt restructuring, and undertaken sustained fiscal consolidation while safeguarding social spending,” the IMF said.
Growth outlook remains favourable
The IMF indicated that the Zambian economy continued to expand in the first half of 2025, with real GDP growth projected at 5.2 per cent for the year, although slightly tempered by weaker-than-expected performance in mining, wholesale and retail trade.
Inflationary pressures are easing, supported by a stronger kwacha, lower fuel prices and improved food supply, even though the pace of disinflation has been slower than initially envisaged.
Despite favourable terms of trade, including higher international copper prices, the current account deficit is projected to widen to about 2.1 per cent of GDP in 2025, driven by broad-based import growth and lower official grants. Gross international reserves are expected to rise further, covering about four months of prospective imports by end-2025.
Over the medium term, growth is projected to average 5.6 per cent between 2026 and 2031, underpinned by investment, strong agricultural production and improved electricity generation. Inflation is expected to gradually converge to the authorities’ 6–8 per cent target band by 2027.
Fiscal discipline remains critical
On fiscal performance, the IMF said outcomes remain strong, supported by non-mining revenues and restrained spending, even as social spending increases in line with government priorities.
The 2025 primary surplus is projected at 2.2 per cent of GDP, including repayment of fuel arrears, while revenues excluding grants are expected to reach 22.6 per cent of GDP.
“Given the high risk of debt distress, maintaining fiscal discipline and containing new borrowing remain critical for debt sustainability,” the IMF cautioned, while welcoming the authorities’ commitment to a prudent fiscal stance through 2026.
Policy priorities
The Fund underscored the need for a carefully calibrated monetary policy to anchor inflation expectations, continued accumulation of international reserves, and further improvements to the monetary policy framework.
It also stressed the importance of pressing ahead with structural reforms to support inclusive, private sector-led growth, including governance reforms, energy sector restructuring, and strengthened oversight of state-owned enterprises.
The IMF mission held meetings with senior government officials, including Minister of Finance and National Planning Dr. Situmbeko Musokotwane and Bank of Zambia Governor Dr. Denny Kalyalya, as well as representatives of the private sector, civil society and development partners.
The Fund expressed appreciation to the Zambian authorities for their close cooperation during the review process.
