Zambia has successfully concluded the second review mission under the Extended Credit Facility (ECF) Programme with the International Monetary Fund (IMF). The collaborative effort resulted in a Staff-Level Agreement (SLA) on economic and financial policies that will guide program implementation for the next 12 months, pending approval by the IMF Management and the Executive Board.
This is according to a statement issued by the Office of the Secretary to the Treasury,Ministry of finance and National Planning.
The agreement, once approved by the IMF Executive Board, is set to trigger the release of approximately $184 million, marking a significant milestone in Zambia’s ongoing economic reform journey. IMF staff praised Zambia for the substantial progress made in restoring macroeconomic and debt sustainability, as well as the effective implementation of the national economic reform agenda.
Zambia’s commitment to ambitious structural reforms has notably improved domestic revenues, strengthened public finance and debt management, and enhanced transparency. The government’s ability to allocate resources to essential sectors like healthcare and education while supporting the vulnerable population has been acknowledged as a positive outcome of the reform initiatives.
The IMF Programme serves as vital support for the Zambian government’s objectives, focusing on achieving fiscal and debt sustainability, reducing poverty, and establishing a solid foundation for inclusive and sustainable growth. The SLA achieved during the second review is a crucial step in Zambia’s collaboration with the IMF and its ongoing efforts toward economic recovery.
Commenting on the development, Dr. Situmbeko Musokotwane, Minister of Finance and National Planning, expressed satisfaction with the achievement of the SLA. He emphasized Zambia’s dedication to restoring macro and debt sustainability and continuing efforts to align the debt restructuring agreement with the IMF program parameters.
“The achievement of the SLA reflects Zambia’s commitment to restore macro and debt sustainability and to continue efforts to reach an agreement in the debt restructuring that is consistent with the IMF program parameters. We are pleased to see that the IMF continues to recognize the ongoing work we are doing to reinvigorate Zambia’s economy and attain sustainable growth,” stated Minister Musokotwane.
Zambia remains engaged in close consultations with its creditors to expedite the debt restructuring process, aligning it with the broader objectives of the IMF program.
The IMF approved an ECF program for Zambia in August 2022. The program involves scheduled regular reviews to assess performance in areas such as restoring fiscal and debt sustainability, improving debt management and transparency, strengthening governance and financial stability, and reducing corruption vulnerabilities. The successful completion of the second review follows the approval of the first review in April 2023, unlocking the second disbursement of approximately US$188 million to Zambia.