The IMF’s executive board has approved the sixth and final review of Zambia’s extended credit facility (ECF), unlocking a $190 million disbursement and bringing total IMF support under the program to about $1.7 billion.
The IMF approved Zambia’s Extended Credit Facility (ECF) programme began in 2022, with initial funding of $1.3 billion later increased to $1.7 billion, to address three urgent goals: restoring macroeconomic stability following the country’s default, facilitating a comprehensive debt restructuring, and rebuilding policy credibility with financial markets and creditors.
READ ALSO: IMF Raises 2026 Growth Forecast for Nigeria and South Africa
The program achieved significant progress on all objectives of its Extended Credit Facility programme, with the programme’s true value lying in its catalytic role of unlocking debt restructuring, improving fiscal discipline, and restoring market confidence. The final $190 million disbursement, while modest, symbolically confirms the country has met its benchmarks, stabilized its economy, and repaired creditor relationships, now transitioning into a critical phase of maintaining this credibility independently without IMF oversight.
In 2025, Zambia’s economy had demonstrably turned a corner, as evidenced by strong key indicators including a nominal GDP of approximately $29.4 billion, robust real GDP growth of around 5.8%, and a GDP per capita of roughly $1,353, alongside declining inflation moving toward 11% by year-end and healthy international reserves of about $4.7 billion, providing over four months of import cover.
Growth has been driven primarily by mining, a rebound in agriculture, and improving activity in services following drought-related disruptions.
While Zambia remains a small economy in absolute terms, its growth momentum in 2025 placed it among the faster-recovering economies in Southern Africa.
The IMF’s contribution to Zambia’s recovery extended far beyond financial aid, serving as a critical anchor for comprehensive reform. Its programme provided the essential framework for successful debt restructuring with various creditors, leading to a resolution of 92–94% of targeted external debt and a reduction in public debt from over 130% to around 90% of GDP. Concurrently, it enforced fiscal discipline that moved the budget toward primary surpluses while protecting social spending, guided the steady accumulation of foreign reserves to stabilise the currency, and drove governance reforms in key areas like procurement and mining-sector transparency to curb fiscal leakage.
This recent success contrasts with Zambia’s long and complicated history with the IMF, a relationship dating to 1965 that has cycled through structural adjustment, a break in 1987, re-engagement and debt relief, and a period of heavy borrowing that culminated in a 2020 default. The completed 2022–2026 Extended Credit Facility programme is historically significant as a rare instance of Zambia fulfilling all IMF conditions, marking a departure from the country’s pattern of incomplete engagements.
Notably, Zambia chose not to extend this programme despite the potential for additional funding, a decision influenced by upcoming elections, the political optics of regaining economic sovereignty, and a strategic preference for negotiating a new arrangement later. This choice grants greater policy autonomy but also heightens the risk of fiscal slippage, as the country must now maintain discipline without the IMF’s direct oversight and enforcement mechanisms.
Zambia’s exit strategy is comparatively ambitious, aiming for a cleaner break than peers like Ghana or Sri Lanka, which have struggled with repeated re-engagements or prolonged dependency. However, this path is fraught with ongoing challenges, including persistent vulnerabilities from copper dependence, climate-related droughts, a still-high debt overhang, cost-of-living pressures, and the perennial risk of election-year spending loosening fiscal discipline.
Looking ahead, Zambia stands at a critical juncture with a cautiously optimistic medium-term outlook. The completion of the IMF programme hands the country the responsibility to convert its hard-won stability into lasting structural transformation by capitalizing on opportunities in copper production, agriculture, foreign investment, and regional trade. The final disbursement symbolises a restored trust and the rare asset of choice; the ultimate test will be whether Zambian authorities can independently sustain the discipline required to build a foundation for durable development.
