The International Monetary Fund (IMF) says Zambia has made notable progress in restoring macroeconomic stability and strengthening public institutions but cautions that the country remains vulnerable to debt distress and external shocks, underscoring the need for sustained reforms and a stronger focus on inclusive growth. Speaking at a town hall meeting on Zambia’s 2021–2025 economic performance and the 2026 budget and economic outlook on Thursday, IMF Resident Representative, Eric Lautier, said a series of institutional and structural reforms implemented by the Government had significantly improved debt management, monetary stability and social protection systems. “The debt is now better managed and better controlled,” Lautier said, citing the enactment of the Public Debt Management Act, the establishment of a dedicated Debt Management Office, and strengthened systems for debt monitoring and reporting.
He added that the regular publication of quarterly debt statistics has enhanced transparency and accountability in public finance management. Lautier noted that monetary policy had remained firmly focused on anchoring inflation, while exchange rate stability has been maintained. He also highlighted progress on Zambia’s structural reform agenda, particularly in the energy sector.
Fuel subsidies have been removed, and energy pricing has been liberalised through a transparent monthly pricing mechanism. In addition, opening the TAZAMA pipeline to competition has reduced transport premiums, contributing to lower diesel prices. In the agricultural sector, subsidies have been reformed through a transition to a voucher-based system, while public financial management has been strengthened through improved cash management and the rollout of electronic platforms.
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Lautier said governance reforms had also advanced, including improvements in public audit processes, procurement transparency and progress towards access-to-information legislation. He noted that the reform programme had enabled a reallocation of government spending towards social sectors, with social cash transfers significantly scaled up last year to protect vulnerable households. “These outcomes reflect the institutional effort and the hard work of the Government of Zambia.
They matter for macroeconomic stability and for social outcomes,” Lautier said. However, he cautioned that reforms must be sustained to ensure economic growth becomes more inclusive and broad-based.
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