<\/p>\n
The warning appears in an IMF technical assistance report examining the effect of droughts, floods, extreme heat and rainfall volatility on Zambia\u2019s economy and public finances.<\/p>\n
<\/p>\n
IMF modelling projects debt at 119.9% of gross domestic product under the most severe scenario, compared with 60.3% under the baseline. Debt could reach 93.8% under the hot scenario and 74.4% under the high-emissions scenario.<\/p>\n
<\/p>\n
The Fund stressed that the figures were illustrative scenarios rather than forecasts but said the results demonstrated how weaker growth, declining revenue and rigid expenditure could undermine debt sustainability.<\/p>\n
<\/p>\n
The 2023-2024 drought demonstrated the economic risks. Maize production fell by 54%, while severe electricity load-shedding reached as much as 23 hours daily as water levels affecting hydropower generation declined.<\/p>\n
<\/p>\n
Hydropower accounts for about 80% of Zambia\u2019s installed generation capacity, while mining, the country\u2019s main export sector, is the largest electricity consumer.<\/p>\n
<\/p>\n
The Fund said prolonged power shortages could reduce mining production and tax revenue, increase electricity imports and place pressure on government to support the energy sector.<\/p>\n
<\/p>\n
A severe drought could reduce economic growth by 0.7 percentage points during the first year, followed by losses of 0.5 and 0.6 percentage points during the following two years.<\/p>\n
<\/p>\n
The Fund estimated that the associated revenue loss could reach 0.2% of gross domestic product.<\/p>\n
<\/p>\n
Additional drought-related government spending amounted to about 1% of gross domestic product in 2024 and 0.3% in 2025.<\/p>\n
<\/p>\n
The modelling found that one severe drought between 2030 and 2032 could raise public debt to 76% of gross domestic product without corrective fiscal measures. Returning debt to the previous trajectory could require an adjustment equivalent to about 4% of gross domestic product.<\/p>\n
<\/p>\n
The Fund recommended that Zambia quantify long-term climate risks by October 2027 and publish the first numerical climate-risk assessment in the Fiscal Risk Statement.<\/p>\n
<\/p>\n
Zambia should expand the analysis to floods and storms, clarify institutional responsibility and strengthen the fiscal-risk register by identifying exposure, potential costs and mitigation measures, the IMF concluded.<\/p>\n
<\/p>\n
–IMF\/ChannelAfrica–<\/p>\n","protected":false},"featured_media":50689,"template":"","meta":{"_acf_changed":false,"_members_access_role":[],"_members_access_error":"","_links_to":"","_links_to_target":""},"news-type":[26],"class_list":["post-50688","news","type-news","status-publish","has-post-thumbnail","hentry","news-type-general_news","entry"],"acf":{"short_description":"Unchecked climate change could push Zambia\u2019s public debt to almost 120% of gross domestic product by 2099, reversing gains from debt restructuring and fiscal consolidation, the International Monetary Fund (IMF) says.\r\n","published_date":"","news_description":"Unchecked climate change could push Zambia\u2019s public debt to almost 120% of gross domestic product by 2099, reversing gains from debt restructuring and fiscal consolidation, the International Monetary Fund (IMF) says.","form_embed":"","author":"","image_caption":""},"_links":{"self":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/50688","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news"}],"about":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/types\/news"}],"version-history":[{"count":2,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/50688\/revisions"}],"predecessor-version":[{"id":50691,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/50688\/revisions\/50691"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media\/50689"}],"wp:attachment":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media?parent=50688"}],"wp:term":[{"taxonomy":"news-type","embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news-type?post=50688"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}