Zambia Chooses New IMF Programme to Support Economic Stability

Post by : Saif Nasser

Zambia has announced that it will seek a new financial programme with the International Monetary Fund instead of extending its current loan agreement, which is set to expire at the end of this month. The decision marks an important step in the country’s efforts to stabilize its economy and continue long-term reforms.

Earlier, the government had considered a one-year extension of its existing loan facility, which could have provided about 145 million dollars in additional funding. However, the finance ministry said the country has now chosen to move forward with a full successor programme. Officials stressed that this decision does not signal a break from reforms or cooperation with the IMF.

The current IMF programme began in 2022 after Zambia defaulted on its debt in 2020. The goal was to restore confidence, control public finances, and put the country back on a sustainable debt path. The programme is nearing completion and is expected to undergo its final review later this month.

Zambia’s decision initially caused concern among investors, leading to a drop in the value of the country’s bonds. After confirmation that a new programme would be pursued, bond prices recovered slightly, showing cautious market confidence in Zambia’s economic direction.

The IMF estimates that Zambia’s economy grew strongly in 2025 and expects inflation to fall back within the central bank’s target range over the next two years. These positive signs support the government’s view that the country is ready to move into a new phase of economic management.

Talks with the IMF on the next programme are expected to begin soon after the current agreement ends. The government has said it aims to ensure a smooth transition to avoid economic disruption.

President Hakainde Hichilema is facing national elections later this year and is under pressure from high inflation that continues to affect everyday life. Maintaining policy stability during this transition is seen as crucial to preserving public trust and investor confidence.

Zambia’s move reflects a broader effort to show commitment to reform while seeking continued international support. A new IMF programme could help the country manage debt, strengthen growth, and protect its economy during a sensitive political and financial period.