The assessment follows a visit to Lusaka by an IMF staff team led by Edward Gemayel from February 24 to March 4.
In a statement at the end of the mission, Gemayel said Zambia’s successful restructuring of public external debt, stronger international reserves, improved investor confidence and declining inflation reflect “sustained reform efforts” under the now‑concluded Extended Credit Facility programme. Inflation has recently fallen within the Bank of Zambia’s target band, while economic growth has picked up.
The IMF maintains a positive outlook for Zambia, though it warns that risks have increased amid domestic challenges and rising global uncertainty. Growth for 2025 has been revised down to 4.5% due to weaker mining output, slower wholesale trade and ongoing energy supply constraints affecting non‑mining sectors. Growth of 5.5% is projected for 2026, reflecting a normalisation in agricultural production after last year’s exceptional harvest.
Global oil price increases and geopolitical tensions could place renewed pressure on inflation and the kwacha. The IMF says domestic fuel price adjustments may be required if international oil prices remain high in order to prevent revenue losses from fuel taxes.
The mission raised concerns about emerging fiscal pressures, noting that the 2026 budget’s planned primary surplus could be weakened by rising wage costs, agricultural support and election‑related spending. Without corrective measures, the IMF estimates the surplus could fall by one percentage point of gross domestic product, compared with the 3.8% target in the previous programme review. It also urged close management of Food Reserve Agency operations to avoid renewed quasi‑fiscal risks.
The IMF emphasised the need for greater transparency in integrating all spending pressures into the fiscal framework, while continuing structural reforms to strengthen revenue administration and broaden the tax base. Zambian authorities expressed interest in a successor arrangement, with preliminary discussions expected as early as April, though substantive engagement will resume after national elections later this year.
The IMF team met President Hakainde Hichilema, Finance Minister Situmbeko Musokotwane, Bank of Zambia Governor Denny Kalyalya and other senior officials during the visit.
–IMF/ChannelAfrica–
