IMF and Zambia Reach $1.47 Billion Credit Agreement

The International Monetary Fund and Zambian authorities reached a staff-level agreement on October 9, 2026, for a new 36-month arrangement under the Extended Credit Facility. The proposed package is valued at 1.472 billion dollars (SDR 1,076 million) and is designed to safeguard macroeconomic stability, ensure debt sustainability, and rebuild fiscal buffers.

While Zambia's GDP is projected to grow by 5.6 percent in 2026 and inflation has dropped to 6.1 percent, the country's fiscal position has weakened. This decline resulted from underperforming VAT collections, lower fuel taxes, and high spending by the Food Reserve Agency. To address these deficits, the government will reverse temporary fuel-tax relief and reduce non-priority capital spending.

The program mandates that the primary surplus increase to 3 percent of GDP by 2029 through the rationalization of exemptions and improved tax administration. The agreement now awaits final approval by the IMF Executive Board.