Zambia has formally requested a new IMF programme on the backdrop of its most recent $1.7 billion IMF Extended Credit Facility (ECF), which ended in January 2026.
An IMF team is scheduled to visit from February 25 to March 4, with authorities expecting a staff-level agreement by May, pending board approval. The timing is delicate: national elections are scheduled for August 2026, with President Hakainde Hichilema seeking re-election.
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Zambia approaches 2026 with its economy significantly stabilised compared to its 2020 sovereign default, showing clear signs of recovery from debt distress. Key indicators underscore this progress: robust real GDP growth is projected to reach 5.8%–6.4% in 2026, inflation has entered single digits, and public debt has been sharply reduced from 133% of GDP in 2023 to approximately 90.7% by the end of 2025. This fiscal consolidation is supported by a targeted fiscal surplus and bolstered foreign reserves, alongside an ambitious goal to produce over one million tonnes of copper.
Despite these macroeconomic improvements, the nation has not yet achieved a structural transformation that broadly uplifts living standards. The deep-rooted challenge of widespread poverty persists, with an estimated 74.4% of the population still living below $3.20 per day based on 2019 data. Thus, while the country has successfully navigated the immediate crisis and restored foundational stability, translating this recovery into inclusive growth and poverty reduction remains the critical, unmet task ahead.
Zambia’s previous IMF programme (2022–2026) had stabilisation as its core objective, focusing on restoring macroeconomic order, rebuilding foreign reserves, negotiating a complex debt restructuring with creditors, and anchoring fiscal discipline to recover from the nation’s 2020 default.
The next programme is expected to be different in emphasis. Officials have indicated a preference for a framework that allows sufficient time for implementation and continuity beyond the election cycle.
If approved, the new IMF arrangement would serve as a macroeconomic credibility partner for Zambia, anchoring fiscal discipline by maintaining surplus targets and preventing election-year slippage, while protecting hard-won debt sustainability by consolidating recent restructuring gains. Furthermore, it aims to strengthen investor confidence in key sectors like mining and energy by signalling policy continuity, and would expand the reform scope to actively drive structural growth, moving the relationship beyond mere crisis stabilisation toward a partnership for long-term transformation.
The IMF has provided critical and measurable support to Zambia’s recovery through substantial financial and technical assistance. Its direct financial support of $1.7 billion in disbursements delivered essential liquidity and helped rebuild gross reserves to $4.7 billion. Crucially, the programme was instrumental in achieving a debt restructuring breakthrough, securing agreements with official creditors and Eurobond holders that will save Zambia an estimated $7.6 billion in debt service through 2026. These actions, alongside policy anchoring, have driven major macroeconomic stabilisation, with inflation falling from over 20% to single digits and the kwacha appreciating significantly.
Beyond fiscal stability, the programme has fostered important structural improvements in governance and social protection. It has enhanced transparency in public financial management and key sectors like mining, while also mandating the expansion of social safety nets, including cash transfers and “cash-for-work” initiatives, to mitigate the impact of austerity on vulnerable populations. Ultimately, while the IMF programme has successfully created vital fiscal space and restored order, Zambia’s long-term development now depends on how effectively the government utilises this hard-won breathing room to invest in inclusive and transformative growth.
Zambia’s relationship with the IMF since the 1970s is a history of recurring cycles. The country first turned to the Fund after the collapse of copper prices, enduring Structural Adjustment Programmes in the 1980s and market liberalisation in the 1990s, which often brought social hardship. A period of genuine relief came with the Heavily Indebted Poor Countries (HIPC) initiative in the early 2000s, which slashed debt and spurred growth, but this stability was squandered through renewed borrowing, leading to Africa’s first pandemic-era sovereign default in 2020. The current 2022–2026 IMF programme represents the most comprehensive stabilisation effort since HIPC, successfully reducing inflation and debt and restoring growth.
The present moment in early 2026 is defined by both significant opportunity and acute risk. Copper production is surging, positioning Zambia as a key player in the global energy transition, while the agriculture and energy sectors are rebounding. However, these positives are tempered by immediate challenges, including floods, a cholera outbreak, and election-year spending pressures. Within Africa, Zambia now stands out as a pioneer, having become the first nation to navigate a post-default debt restructuring under the G20 Common Framework, successfully distinguishing its recovery path from peers like Ghana and Kenya.
Zambia’s request for a new IMF arrangement signals a strategic pivot from crisis negotiation to negotiating from a position of recovery. The critical question is no longer if the country can achieve stabilisation; it has repeatedly proven it can, but whether this cycle can finally institutionalise discipline. Sustainable growth depends on managing copper revenues prudently, maintaining fiscal surpluses beyond electoral cycles, and deepening reforms to ensure this hard-won stability outlasts the IMF programme itself.
