The International Monetary Fund (IMF) Executive Board has approved the immediate release of US$569.6 to Zambia following the country’s satisfactory performance under the Extended Credit Facility (ECF) when it came up for a third review. This expansion brings Zambia’s total disbursement so far under the ECF-supported program to SDR 852.98 million (about US$1.1 billion).
“Program performance has been satisfactory. All quantitative performance criteria for the third review were met, and all but one of the structural conditionalities were completed,” the IMF said in a statement released on June 26 in Washington.
The IMF said the Zambian government has also progressed in its structural reform agenda, with all continuous and end-December 2023 structural benchmarks, and all but one end-March 2024 structural benchmark being completed on time.
“The Board announced its conclusion of the third review of Zambia’s 38-month ECF Arrangement and approved an augmentation of SDR 293.46 million (about US$385.7 million). Completion of the review allows for an immediate disbursement of SDR 433.34 million (about US$569.6 million),” the Fund stated.
Antoinette Sayeh, IMF Deputy Managing Director and acting chair, said, “The authorities’ satisfactory performance under the ECF-supported arrangement and continued focus on economic stabilization and reforms have resulted in stronger-than-envisaged fiscal and economic outcomes and progress on structural reforms.”
Finance and National Planning Minister Situmbeko Musokotwane said the IMF executive board’s approval testifies to its confidence in the government’s efforts to achieve its home-grown reform agenda of restoring macroeconomic stability, attaining fiscal and debt sustainability, enhancing human development, and improving the good governance environment.
The IMF said the government is committed to supporting macroeconomic stability, restoring fiscal and debt sustainability, clearing arrears, and addressing Zambia’s drought-related humanitarian needs.
“The authorities are also taking steps to improve governance and advance structural reforms to foster growth.”
The IMF noted that Zambia is grappling with a severe drought that has significantly impacted agriculture and electricity generation, affecting a substantial share of the population.
“Consequently, growth projections for 2024 have been revised down to 2.3 percent, from 4.7 percent, and the 2024 budget has been revised to accommodate the drought’s impact. Despite these challenges, the authorities remain committed to supporting macroeconomic stability, restoring fiscal and debt sustainability, clearing arrears, and addressing Zambia’s humanitarian needs.”
The IMF approved Zambia’s ECF Arrangement in August 2022 for US$1.3 billion. The program supports the country’s Eighth National Development Plan, which seeks to entrench macroeconomic stability, attain debt and fiscal sustainability, enhance public governance, and foster inclusive growth to improve the livelihood of the Zambian people, especially the vulnerable.
