Zambia secures IMF staff-level backing for new $1.5 billion programme

The International Monetary Fund (IMF) ​said on Friday it ‌had ​reached a staff-level agreement with Zambia on a new Extended Credit Facility worth about $1.5 billion.

An IMF team led ‌by Edward Gemayel that visited Lusaka from September 29 to October 9 said the proposed programme was aimed at preserving macroeconomic stability, strengthening economic resilience and supporting the ‌country's growth ambitions. Gemayel told a press conference that Executive Board approval was ‌expected around December, with disbursements to be made every six months over the facility's three-year duration.

The agreement, which will give Zambia access to 1,076 million Special Drawing Rights, comes as ⁠the ​country prepares its 2027 ⁠budget, with the finance ministry saying this week that government spending is projected to rise ⁠by 7%. The Southern African country's previous $1.7 billion IMF programme, which helped it emerge from ​a prolonged debt crisis after becoming Africa's first COVID-19 pandemic-era sovereign default in ⁠2020, expired in January.

The IMF forecast economic growth of 5.6% for Zambia in 2026, underpinned ⁠by ​strong performances in agriculture, mining and exports. However, it said Zambia's fiscal position had weakened due to lower than expected revenue collections and higher than budgeted ⁠spending by the Food Reserve Agency.

Zambia's 2033 eurobond gained on the news, ⁠with bids rising to ⁠95.82 cents on the dollar, Tradeweb data showed.