LUSAKA – Zambia is poised to receive a significant financial boost from the International Monetary Fund (IMF) as it progresses with its economic reforms. The country secured a Staff-Level Agreement (SLA) with the IMF, which could unlock a $184 million tranche following the second review under the Extended Credit Facility (ECF) Programme. This development, announced today by the Ministry of Finance, is contingent on final approval by the IMF’s Executive Board.
The impending funds are part of a larger $1.4 billion ECF program initiated in August 2022, designed to enhance macroeconomic stability and debt sustainability in Zambia. The program underscores the nation’s commitment to fiscal discipline, improved revenue collection, and financial governance reforms that are essential for funding critical sectors such as healthcare and education.
Finance Minister Dr. Situmbeko Musokotwane emphasized that the IMF program is crucial for poverty reduction and establishing a foundation for inclusive economic growth. The agreement reflects Zambia’s determination to revitalize its economy while ensuring debt sustainability and supporting vulnerable populations within an inclusive growth framework.
The ECF program has set forth objectives for fiscal rectitude, poverty alleviation, corruption mitigation, and close creditor consultations to align debt restructuring with IMF standards. This recent milestone follows the initial review in April 2023, which released $188 million in support of Zambia’s reform-driven journey.
Treasury Secretary Felix Nkulukusa lauded the IMF’s backing for Zambia’s restructuring efforts aimed at promoting sustainable development goals. The SLA aims to reinforce economic reforms that have been underway since last year, including measures to enhance revenue collection and enforce fiscal discipline.
The expected financial injection from the IMF is anticipated to further these efforts, marking a significant stride towards achieving Zambia’s economic targets and bolstering investor confidence in the country’s reform agenda.