• Zambia and IMF have reached a staff-level agreement on economic policies to conclude first review of the 38-month ECF supported program.
• Once approved, this will bring the total IMF financial support to US$376 million.
• Zambia needs official creditors to move forward and reach agreement on a debt treatment.

International Monetary Fund (IMF) says Zambia will receive the second disbursement of about US$188 million once review of the first 38-month Extended Credit Facility (ECF) supported program is approved by the Fund’s Management and formally completed by its Executive Board.
In a statement, IMF Mission Chief for Zambia, Allison Holland said once approved, this will bring the total IMF financial support disbursed under the ECF arrangement to Special Drawing Right (SDR) 280 million or about US$376 million.
Ms. Holland revealed that Zambia and the IMF have since reached a staff-level agreement on economic policies to conclude the first review of the 38-month ECF supported program.
She said the agreement follows a visit to Lusaka from 22nd March to 5th April, 2023 by the IMF’s mission team for Zambia led by herself.
“The Zambian authorities and IMF staff team have reached a staff-level agreement on the first review of Zambia’s economic program under the ECF arrangement. The staff-level agreement is subject to IMF Management approval and Executive Board consideration once the necessary financing assurances have been received.”
“To remove any hurdles to the timely completion of the review, Zambia needs official creditors to move forward and reach agreement on a debt treatment in line with the financing assurances they provided in July 2022,” Ms. Holland said.
Zambia’s external debt stood at US$18.6 billion at the end of 2022, of which about US$5.7 billion was owed to Chinese creditors and US$3.5 billion to bondholders.
And Ms. Holland noted that Zambia’s economy has rebounded, as fiscal credibility has been restored, and, with the authorities’ continued strong reform momentum, growth is expected to pick-up further in the medium-term.
She observed that the Zambian government remains committed to strengthening transparency and fighting corruption.
“An agreement with official creditors on a debt treatment in line with program parameters would provide the needed financing assurances. Upon completion of the Executive Board review, Zambia would have access to SDR 140 million about US$188 million, bringing the total IMF financial support disbursed under the arrangement to SDR 280 million about US$376 million.”
“In line with the government’s commitments under the Fund-supported program, fiscal performance has been very strong. Spending has remained within budget limits and, importantly, social spending has increased in line with government targets. While revenues from the mining sector were lower than expected due to production challenges and a drop in copper prices, they were more than offset by higher revenue collection from other sectors of the economy. Ambitious structural fiscal reforms are contributing to raising domestic revenues, strengthening public financial management and debt management, and transparency,” she noted.
Meanwhile, Finance Minister Dr. Situmbeko Musokotwane expressed optimism that working with the Official Creditor Committee and other creditors, Zambia shall soon reach an agreement on debt restructuring, which will help the country achieve economic recovery and attain sustainable growth.
He noted that the Staff Level Agreement marks an important step in Zambia’s cooperation with the IMF and the country’s journey towards economic recovery and approval by the Fund’s Executive Board will trigger the second disbursement.
“We are pleased to see that our partners recognize the progress we have made in reinvigorating the Zambian economy. Zambia has played its part, but before we can reap the benefits of this successful review, we need to see progress on our debt restructuring.”
“We are grateful to the IMF and all our creditors for their continued support. We will continue to work together to ensure that a debt restructuring deal for Zambia can be achieved as swiftly as possible. It is essential that we continue to access IMF funding to anchor our reform agenda and invest in development. It is in everybody’s interest that Zambia succeeds,” Dr. Musokotwane stated.
On 31st August 2022, the IMF Executive Board approved a 38-month arrangement under the Extended Credit Facility (ECF) in an amount equivalent to SDR 978.2 million around US$1.3 billion, or 100 percent of quota.
The program is based on Zambia’s homegrown economic reform plan that aims to restore macroeconomic stability and foster higher, more resilient, and more inclusive growth.