Karachi, The International Monetary Fund (IMF) Executive Board has completed the second review under Zambia’s Extended Credit Facility (ECF) Arrangement, approving an immediate disbursement of about US$187 million.
According to International Monetary Fund, this disbursement under the 38-month ECF Arrangement, initiated on August 31, 2022, brings Zambia’s total receipt to approximately US$561 million. The ECF Arrangement, totaling about US$1.3 billion, is designed to support Zambia’s 8th National Development Plan, focusing on macroeconomic stability, debt and fiscal sustainability, inclusive growth, and improving the livelihoods of the Zambian people, especially the vulnerable.
The program’s performance has been satisfactory, despite a challenging domestic and global environment. Zambia met all but one of the quantitative performance criteria for the second review, and most of the structural conditionality was completed. The authorities requested a waiver for missing the net international reserve target at the end of June 2023 and have implemented corrective measures.
Zambia’s economic performance has been resilient, with growth revised upwards to 4.3 percent in 2023, driven by strong performance in non-agricultural and non-mining sectors. The authorities remain committed to fiscal and debt sustainability, social spending, financial stability, and structural and governance reforms.
Ms. Antoinette Sayeh, Deputy Managing Director and Acting Chair of the Executive Board, emphasized the importance of Zambia’s continued fiscal consolidation, revenue mobilization, and public financial management reforms. She also acknowledged the memorandum of understanding (MoU) with official bilateral creditors and the ongoing negotiations with private creditors, which are essential for restoring debt sustainability.
The Bank of Zambia is prepared to tighten monetary policy further to manage inflation and is committed to maintaining exchange rate flexibility and building external resilience. Financial sector reforms are underway to enhance financial stability and inclusion.
Governance and structural reforms remain key to promoting private sector development and economic diversification. Efforts to enhance procurement transparency, disclose beneficiary ownership, improve public access to information, and combat corruption are crucial for creating a conducive environment for private investment and inclusive growth. The integration of climate mitigation and adaptation strategies into national policies is also a part of Zambia’s reform agenda.