Zambia reaches $1.47 billion staff-level agreement with IMF

The Zambian government has successfully reached a pivotal staff-level agreement with the International Monetary Fund (IMF) on a new 36-month Extended Credit Facility (ECF) valued at $1.472 billion, equivalent to 1.076 billion Special Drawing Rights. Announced in Lusaka following extensive deliberations between government officials and an IMF mission led by Edward Gemayel, the proposed program is designed to consolidate macroeconomic stability, protect debt sustainability, and propel the nation's transition toward broad-based, private-sector-led economic growth. Finance and National Planning Minister Situmbeko Musokotwane noted that the new financing package arrives as Zambia builds upon the foundational successes of its recently concluded IMF program. The economy has demonstrated notable resilience, with real gross domestic product growth projected at a robust 5.6 percent, fueled by recoveries in agricultural output, dynamic mining operations, and buoyant export performance. Furthermore, inflation has receded into the Bank of Zambia's target band at 6.1 percent, while gross international reserves climbed to $6.1 billion, providing a stable footing for the successor arrangement. Despite these positive macroeconomic indicators, fiscal pressures intensified over the past year due to revenue shortfalls and external shocks, necessitating corrective policy measures. To address these challenges, the new program is anchored on a growth-oriented, revenue-led fiscal strategy. Beginning in 2027, the administration aims to progressively raise the primary fiscal surplus to 3 percent of GDP by 2029. This will be pursued through strengthened domestic revenue mobilization, enhanced tax administration, and the rationalization of tax exemptions under a comprehensive Medium-Term Revenue Strategy, all while safeguarding vital social spending. Structural reforms under the framework will closely align with the government's newly emphasized Grow Zambia Agenda. Priority areas include