The International Monetary Fund (IMF) has warned that rising global oil prices and escalating geopolitical tensions could place renewed pressure on inflation and the exchange rate in Zambia.
The IMF said if these pressures persist, Zambia may need to adjust domestic fuel prices to reflect higher international oil costs in order to avoid potential losses in fuel tax revenues. The Fund stressed that maintaining strong policy discipline and building economic buffers will be critical to sustaining macroeconomic stability.
Despite the risks, the IMF highlighted several positive economic developments in Zambia, including improved fiscal discipline and continued progress in the country’s debt restructuring process. These measures, it said, are helping to stabilise the economy.
The Fund added that Zambia’s economic outlook remains cautiously optimistic, supported by expected improvements in electricity generation, recovery in the mining and agriculture sectors, and ongoing structural reforms.
However, the IMF cautioned that challenges remain. It urged the government to maintain prudent fiscal management, strengthen revenue mobilisation and ensure social spending is protected while still supporting economic growth.
Meanwhile, Zambia has expressed interest in negotiating a successor programme with the IMF as it continues implementing economic reforms.
An IMF staff team led by Edward Gemayel, which recently concluded a visit to the country, said preliminary discussions on a possible successor programme could begin as early as April this year. However, substantive policy negotiations are expected to resume only after the country’s general elections later this year.
During the visit, the IMF delegation held meetings with Hakainde Hichilema, Situmbeko Musokotwane and Denny Kalyalya to discuss Zambia’s economic outlook and reform progress.
Only oil ???
I’m sure other factors were mentioned