Zambia to begin IMF talks ahead of elections, deal expected after August polls

Zambia is preparing to open negotiations with the International Monetary Fund (IMF) on a new economic programme, although government officials say the agreement will only be concluded after the country’s general elections in August. Finance and National Planning Minister, Situmbeko Musokotwane, said discussions with the IMF would begin “almost immediately,” providing the clearest indication yet of Lusaka’s intended timeline for engagement with the lender. However, the government has deliberately opted to delay finalising a deal until after the polls, citing the need for continuity in implementation.

Zambia’s previous IMF programme — a US$1.7 billion extended credit facility approved in 2022 — expired in January after guiding the country through a complex debt restructuring process following its 2020 sovereign default. The programme was initially requested at US$1.3 billion before being revised upwards to stabilise the economy and avert a deeper financial crisis. Last week, the IMF completed its sixth and final review of the arrangement, unlocking a further US$190 million in financing.

Government had explored the possibility of securing an additional US$145 million through a one-year extension of the programme, but later abandoned the plan in favour of negotiating a new arrangement aligned with improved macroeconomic conditions and longer-term growth objectives. Musokotwane has repeatedly maintained that fiscal discipline would be sustained during the interim period between IMF programmes. Nevertheless, political timing remains a key factor.

[paywall]

Parliament is expected to dissolve in May, raising questions about whether a new IMF agreement could be concluded before then. The Finance Minister’s remarks suggest that negotiations will continue, but final approval is likely to wait until after the elections. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express permission from ZAMBIA MONITOR.

[/paywall]