Susiku Talks Business

29/01/2026

𝗙𝗿𝗼𝗺 𝗦𝘁𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝘁𝗼 𝗚𝗿𝗼𝘄𝘁𝗵: 𝗔 𝗥𝗲𝘃𝗶𝗲𝘄 𝗼𝗳 𝗭𝗮𝗺𝗯𝗶𝗮’𝘀 𝗜𝗠𝗙 𝗘𝗖𝗙 𝗝𝗼𝘂𝗿𝗻𝗲𝘆 - 𝗔𝗰𝗵𝗶𝗲𝘃𝗲𝗺𝗲𝗻𝘁𝘀, 𝗖𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲𝘀, 𝗮𝗻𝗱 𝘁𝗵𝗲 𝗥𝗼𝗮𝗱 𝗔𝗵𝗲𝗮𝗱

By Susiku I. Nasinda
29 January 2026

Zambia has achieved significant progress in restoring macroeconomic stability, reinforcing creditor confidence and fostering economic resilience thanks to the successful conclusion of its 38-month, US$1.7 billion IMF ECF program. Next steps involve translating these gains into sustained growth, economic transformation, and tangible improvements in the livelihoods of ordinary citizens.

𝗞𝗲𝘆 𝗣𝗼𝗶𝗻𝘁𝘀:

o Zambia has successfully completed its 38-month IMF Extended Credit Facility (ECF), a program it has been pursuing since 2022.

o The IMF Executive Board has confirmed that it has completed the sixth and final review under the 38-month Extended Credit Facility Arrangement, which has supported Zambia’s reform agenda aimed at restoring macroeconomic stability, building economic resilience, and promoting sustainable and inclusive growth.

o Zambia’s economy has shown economic strength amid external and domestic shocks. Continued reforms are essential to safeguard macroeconomic stability, and debt and fiscal sustainability.

o Policy focus remains on maintaining fiscal discipline and policy credibility to consolidate the hard-earned gains while emphasizing growth-oriented structural reforms, investment mobilization, value addition, and the expansion of inclusive and sustainable economic opportunities.

Introduction

Zambia has completed its 38-month, US$1.7 BILLION Extended Credit Facility (ECF) program with the International Monetary Fund (IMF)—a journey that began in September 2022. The program has achieved its main aims of restoring macroeconomic stability, restructuring unsustainable debt, and fostering inclusive growth after years of economic turbulence.

At program commencement, Zambia faced a perfect storm: high external sovereign debt following its Eurobond default in November 2020, sluggish growth due to the COVID-19 pandemic, and declining copper output amid legal disputes with major mining companies. This situation was compounded by severe drought during the 2023/24 rain season. The drought adversely impacted hydropower generatio

Fast forward to January 2026, Zambia has achieved remarkable progress—stabilizing inflation, rebuilding foreign reserves, and restructuring 94% of its US$13.4 billion debt, resulting in improved sovereign credit rating upgrades.

In a statement released on 2 8th January 2026 Mr. Nigel Clarke, Deputy Managing Director and Acting Chair of the IMF Executive Board issued the following statement:

“𝘋𝘦𝘴𝘱𝘪𝘵𝘦 𝘦𝘹𝘵𝘦𝘳𝘯𝘢𝘭 𝘢𝘯𝘥 𝘥𝘰𝘮𝘦𝘴𝘵𝘪𝘤 𝘴𝘩𝘰𝘤𝘬𝘴, 𝘡𝘢𝘮𝘣𝘪𝘢 𝘩𝘢𝘴 𝘴𝘪𝘨𝘯𝘪𝘧𝘪𝘤𝘢𝘯𝘵𝘭𝘺 𝘳𝘦𝘥𝘶𝘤𝘦𝘥 𝘮𝘢𝘤𝘳𝘰𝘦𝘤𝘰𝘯𝘰𝘮𝘪𝘤 𝘪𝘮𝘣𝘢𝘭𝘢𝘯𝘤𝘦𝘴, 𝘮𝘢𝘥𝘦 𝘤𝘰𝘯𝘴𝘪𝘥𝘦𝘳𝘢𝘣𝘭𝘦 𝘱𝘳𝘰𝘨𝘳𝘦𝘴𝘴 𝘰𝘯 𝘥𝘦𝘣𝘵 𝘳𝘦𝘴𝘵𝘳𝘶𝘤𝘵𝘶𝘳𝘪𝘯𝘨, 𝘢𝘯𝘥 𝘶𝘯𝘥𝘦𝘳𝘵𝘢𝘬𝘦𝘯 𝘴𝘶𝘴𝘵𝘢𝘪𝘯𝘦𝘥 𝘧𝘪𝘴𝘤𝘢𝘭 𝘤𝘰𝘯𝘴𝘰𝘭𝘪𝘥𝘢𝘵𝘪𝘰𝘯 𝘸𝘩𝘪𝘭𝘦 𝘴𝘢𝘧𝘦𝘨𝘶𝘢𝘳𝘥𝘪𝘯𝘨 𝘴𝘰𝘤𝘪𝘢𝘭 𝘴𝘱𝘦𝘯𝘥𝘪𝘯𝘨. 𝘛𝘩𝘦 𝘱𝘦𝘳𝘧𝘰𝘳𝘮𝘢𝘯𝘤𝘦 𝘶𝘯𝘥𝘦𝘳 𝘵𝘩𝘦 𝘱𝘳𝘰𝘨𝘳𝘢𝘮 𝘩𝘢𝘴 𝘣𝘦𝘦𝘯 𝘣𝘳𝘰𝘢𝘥𝘭𝘺 𝘴𝘢𝘵𝘪𝘴𝘧𝘢𝘤𝘵𝘰𝘳𝘺 𝘢𝘯𝘥 𝘵𝘩𝘦 𝘢𝘶𝘵𝘩𝘰𝘳𝘪𝘵𝘪𝘦𝘴 𝘴𝘩𝘰𝘶𝘭𝘥 𝘳𝘦𝘮𝘢𝘪𝘯 𝘧𝘰𝘤𝘶𝘴𝘦𝘥 𝘰𝘯 𝘮𝘢𝘪𝘯𝘵𝘢𝘪𝘯𝘪𝘯𝘨 𝘱𝘳𝘶𝘥𝘦𝘯𝘵 𝘮𝘢𝘤𝘳𝘰𝘦𝘤𝘰𝘯𝘰𝘮𝘪𝘤 𝘱𝘰𝘭𝘪𝘤𝘪𝘦𝘴 𝘢𝘯𝘥 𝘢𝘥𝘷𝘢𝘯𝘤𝘪𝘯𝘨 𝘳𝘦𝘧𝘰𝘳𝘮𝘴 𝘵𝘰 𝘧𝘰𝘴𝘵𝘦𝘳 𝘪𝘯𝘤𝘭𝘶𝘴𝘪𝘷𝘦 𝘢𝘯𝘥 𝘱𝘳𝘪𝘷𝘢𝘵𝘦-𝘴𝘦𝘤𝘵𝘰𝘳-𝘭𝘦𝘥 𝘨𝘳𝘰𝘸𝘵𝘩. 𝘊𝘰𝘯𝘵𝘪𝘯𝘶𝘦𝘥 𝘦𝘯𝘨𝘢𝘨𝘦𝘮𝘦𝘯𝘵 𝘸𝘪𝘵𝘩 𝘵𝘩𝘦 𝘍𝘶𝘯𝘥 𝘢𝘯𝘥 𝘥𝘦𝘷𝘦𝘭𝘰𝘱𝘮𝘦𝘯𝘵 𝘱𝘢𝘳𝘵𝘯𝘦𝘳𝘴 𝘸𝘰𝘶𝘭𝘥 𝘴𝘶𝘱𝘱𝘰𝘳𝘵 𝘵𝘩𝘦𝘴𝘦 𝘱𝘰𝘭𝘪𝘤𝘺 𝘦𝘯𝘥𝘦𝘢𝘷𝘰𝘳𝘴."

The completion of this review allows for an immediate disbursement of SDR 138.9 million (about US$190 million), bringing Zambia’s total disbursement under the ECF-supported program to US$1.7 billion.

This article explores Zambia’s achievements under the ECF, draws insights from the IMF Sixth and Final Review Report of the ECF, highlights persistent structural challenges such as energy insecurity and unemployment, and suggests key focus areas for the IMF successor program.

𝗧𝗵𝗲 𝗖𝗼𝗻𝘁𝗲𝘅𝘁: 𝗪𝗵𝘆 𝗭𝗮𝗺𝗯𝗶𝗮 𝗡𝗲𝗲𝗱𝗲𝗱 𝘁𝗵𝗲 𝗘𝗖𝗙

By late 2020, Zambia’s economy was in crisis. The country became the first African nation to default on Eurobond debt during the Covid-19 pandemic, signaling deep fiscal distress. Public debt soared beyond sustainable levels, foreign reserves dwindled, and inflation surged above 20%, eroding household purchasing power. The kwacha depreciated sharply, while copper production—the backbone of Zambia’s economy—fell due to protracted legal battles with mining giants.

Against this backdrop, the IMF’s ECF program offered a lifeline. Its objectives were clear:

Restore macroeconomic stability through fiscal discipline and monetary tightening.
Restructure Zambia’s unsustainable debt to regain investor confidence.
Safeguard social spending amid fiscal consolidation, and
Implement structural reforms to promote inclusive and resilient growth.

𝗔𝗰𝗵𝗶𝗲𝘃𝗲𝗺𝗲𝗻𝘁𝘀 𝗨𝗻𝗱𝗲𝗿 𝘁𝗵𝗲 𝗘𝗖𝗙: 𝗔 𝗧𝗿𝗮𝗻𝘀𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝘃𝗲 𝗝𝗼𝘂𝗿𝗻𝗲𝘆

𝟭. 𝗠𝗮𝗰𝗿𝗼𝗲𝗰𝗼𝗻𝗼𝗺𝗶𝗰 𝗦𝘁𝗮𝗯𝗶𝗹𝗶𝘁𝘆

The restoration of macroeconomic stability recorded during the ECF is an achievement worth celebrating. Zambia’s economic outlook remains positive. Real GDP growth is estimated at 5.2 percent in 2025, underpinned by strong mining activities and record-high maize production. Real GDP growth in 2026 is projected at 5.8 percent on the back of continued recovery in electricity generation and strong performance in mining and services.

Additionally, Zambia’s inflation, which had spiraled above 20% in 2021, gradually declined to a staggering 9.4% in January 2026 (the first single-digit figure in 3 years). This disinflationary trend was driven by a stronger kwacha supported by improved foreign exchange inflows, lower fuel prices following global adjustments and domestic reforms, and enhanced food supply after targeted agricultural interventions.

The Bank of Zambia has maintained a tight monetary stance, anchoring inflation expectations and reinforcing confidence in the financial system. By 2027, inflation is projected to converge toward the 6–8% target band, signaling a return to long term price stability.

𝟮. 𝗙𝗼𝗿𝗲𝗶𝗴𝗻 𝗥𝗲𝘀𝗲𝗿𝘃𝗲𝘀: 𝗔 𝗛𝗶𝘀𝘁𝗼𝗿𝗶𝗰 𝗛𝗶𝗴𝗵

Zambia’s foreign currency reserves surged to a historic US$5.2 billion in 2025, equivalent to five months of import cover. Nearly 50% of the just concluded IMF program helped to build these forex reserves. This achievement strengthened external buffers and enhanced Zambia’s resilience to global shocks—a stark contrast to the precarious position of 2020.

𝟯. 𝗗𝗲𝗯𝘁 𝗥𝗲𝘀𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗶𝗻𝗴 𝗮𝗻𝗱 𝗖𝗿𝗲𝗱𝗶𝘁 𝗥𝗮𝘁𝗶𝗻𝗴 𝗨𝗽𝗴𝗿𝗮𝗱𝗲𝘀

Perhaps the most celebrated success of the ECF program was Zambia’s progress on debt restructuring. By November 2025, the country had restructured 94% of its US$13.4 billion sovereign debt, including Eurobonds. The IMF has assessed Zambia’s public debt as sustainable. This breakthrough ended Zambia’s five-year default status and paved the way for credit rating upgrades by Standard & Poor’s (CCC+/ C’) for long- and short-term currency sovereign ratings), and Fitch Ratings (‘B-) for Long Term Foreign-Currency (LTFC). These upgrades signaled renewed investor confidence and opened doors for additional concessional financing critical for infrastructure development. They will catalyze FDI inflows in key sectors such as energy and mining.

However, the country must continue with prudent resource management and responsible borrowing as the country remains at high risk of overall and external debt distress despite successful debt restructuring.

𝟰. 𝗙𝗶𝘀𝗰𝗮𝗹 𝗖𝗼𝗻𝘀𝗼𝗹𝗶𝗱𝗮𝘁𝗶𝗼𝗻 𝗮𝗻𝗱 𝗕𝘂𝗱𝗴𝗲𝘁 𝗦𝘂𝗽𝗽𝗼𝗿𝘁

During the IMF program, Zambia’s expenditure budget expanded, reflecting prioritisation rather than austerity. The government achieved primary surplus of 2.2% of GDP in 2025, reflecting strong revenue mobilization and expenditure rationalization. Tax compliance improved, unsustainable fuel subsidies were removed, and reforms in public financial management enhanced transparency and accountability. But most Importantly, social spending was protected, ensuring vulnerable populations were not left behind during fiscal adjustment.

𝟱. 𝗚𝗼𝘃𝗲𝗿𝗻𝗮𝗻𝗰𝗲 𝗮𝗻𝗱 𝗦𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗮𝗹 𝗥𝗲𝗳𝗼𝗿𝗺𝘀

The ECF program catalyzed reforms in key sectors such as mining, energy, banking, and insurance. A nationwide arial minerals geological mapping program was commissioned in 2024 to better understand the country's mineral resource deposits and untapped potential. This is a critical exercise as Zambia pursues its ambitious mining agenda of ramping up copper production from 800,000 metric tonnes currently to 3 million metric tonnes by 2035. In the energy sector, steps were also taken to introduce Open Access to critical infrastructure such as the TAZAMA pipeline (petroleum) and ZESCO electricity transmission lines promoting greater private sector participation, competition and efficiency. Also, the review of the Banking and Financial Services Act and the adoption of the deposit insurance scheme are welcome steps to strengthen financial stability.

𝗣𝗲𝗿𝘀𝗶𝘀𝘁𝗲𝗻𝘁 𝗖𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲𝘀: 𝗧𝗵𝗲 𝗦𝗵𝗮𝗱𝗼𝘄𝘀 𝗕𝗲𝗵𝗶𝗻𝗱 𝘁𝗵𝗲 𝗦𝘂𝗰𝗰𝗲𝘀𝘀

Despite these gains, Zambia’s economy continues to grapple with structural vulnerabilities that could undermine long-term stability.

𝟭. 𝗘𝗻𝗲𝗿𝗴𝘆 𝗖𝗿𝗶𝘀𝗶𝘀

Over the past 24 months, Zambia faced unprecedented electricity blackouts, driven by a severe climate-induced drought during the 2023/2024 rainy season. The drought exposed the country's underinvestment in power generation and highlighted its overreliance on drought-prone hydropower. The energy crisis has disrupted industrial activity, driven up domestic prices, and constrained economic growth. However, the Integrated Resource Plan (IRP) 2024 prioritizes renewable energy (solar investments), from 5% currently to 33% by 2030. The substantial investments in solar energy, exemplified by landmark greenfield initiatives such as the commissioning of the 100 MW Chisamba Solar Plant in July 2025, represent a significant and commendable advancement in Zambia’s energy sector. Furthermore, the strategic investment in baseload power generation, exemplified by the 300 MW brownfield coal-fired facility - Maamba Phase II, represents a noteworthy advancement in strengthening Zambia’s energy security.

𝟮. 𝗛𝗶𝗴𝗵 𝗨𝗻𝗲𝗺𝗽𝗹𝗼𝘆𝗺𝗲𝗻𝘁

While there have been unprecedented recruitments in social sectors such as education and health, job creation has lagged economic recovery, leaving unemployment rates stubbornly high. The mining sector, while recovering, is yet to absorb labor at scale, and other sectors remain constrained by high production costs, electricity blackouts, infrastructure deficits and limited private investment. However, increases in the value and number of Social Cash Transfer beneficiaries has helped cushion the most vulnerable in society.

𝟯. 𝗖𝗹𝗶𝗺𝗮𝘁𝗲 𝗩𝘂𝗹𝗻𝗲𝗿𝗮𝗯𝗶𝗹𝗶𝘁𝘆

Zambia’s dependence on hydropower and rain-fed agriculture exposes it to climate risks, as evidenced by the recent drought-induced power and food shortages. Building climate resilience through diversified energy sources and sustainable agricultural practices is imperative. To guarantee food security, the country must accelerate development of farming blocks, irrigation and water harvesting infrastructure, and early warning systems to increase resilience.

𝗭𝗮𝗺𝗯𝗶𝗮’𝘀 𝗦𝘂𝗰𝗰𝗲𝘀𝘀𝗼𝗿 𝗜𝗠𝗙 𝗣𝗿𝗼𝗴𝗿𝗮𝗺 – 𝗔 𝗖𝗿𝗶𝘁𝗶𝗰𝗮𝗹 𝗥𝗲𝗳𝗹𝗲𝗰𝘁𝗶𝗼𝗻

On 8th January 2026, the Zambian Government formally announced its intention to pursue a more comprehensive, long-term successor arrangement with the IMF, to supersede the just completed Extended Credit Facility (ECF). Key aims of the successor program include maintaining debt sustainability through disciplined borrowing and sound liability management, advancing fiscal consolidation to ensure public finances remain predictable and sustainable, upholding prudent and transparent resource management, including efficient utilization of mineral revenues; and promoting inclusive economic growth that creates jobs, supports diversification, and improves livelihoods for all Zambians.

The Zambian Government has made a commitment to remain firmly anchored to its reform path amidst election pressure. To achieve this, policy continuity should be underpinned by strict adherence to the approved national budget with expenditure ex*****on, borrowing, and fiscal balances implemented within Parliament-approved ceilings. The Government should maintain close, continuous engagement with the IMF, including through Article IV consultations and other technical dialogue.

Transitioning between the two programs won’t be a walk in the park. Maintaining steady reform momentum without IMF oversight is paramount. This will be the ultimate test of Zambia’s governance capacity.

𝗖𝗼𝗻𝗰𝗹𝘂𝘀𝗶𝗼𝗻

Zambia’s completion of the 38-month ECF program is a noteworthy achievement that deserves commendation. It is a testament to disciplined policy implementation and international cooperation. The country has restored macroeconomic stability, restructured its debt, and rebuilt external buffers—achievements that deserve commendation. Authorities must seize the moment, not as an end point, but as a launchpad for accelerated development, long-term economic transformation, and prosperity for all. This can be achieved by shifting emphasis towards growth-oriented structural reforms, investment mobilization, value addition, and the expansion of inclusive and sustainable economic opportunities. The hard part indeed begins now—but with bold leadership and strategic investments, Zambia can sustain its recovery and achieve its dream of becoming a prosperous middle-incime country by 2030.

𝘚𝘶𝘴𝘪𝘬𝘶 𝘐. 𝘕𝘢𝘴𝘪𝘯𝘥𝘢 𝘪𝘴 𝘢 𝘊𝘩𝘢𝘳𝘵𝘦𝘳𝘦𝘥 𝘈𝘤𝘤𝘰𝘶𝘯𝘵𝘢𝘯𝘵 (𝘈𝘊𝘊𝘈) 𝘢𝘯𝘥 𝘋𝘦𝘷𝘦𝘭𝘰𝘱𝘮𝘦𝘯𝘵 𝘍𝘪𝘯𝘢𝘯𝘤𝘦 𝘌𝘹𝘱𝘦𝘳𝘵 𝘴𝘱𝘦𝘤𝘪𝘢𝘭𝘪𝘻𝘪𝘯𝘨 𝘪𝘯 Renewable Energy and Climate Finance. 𝘏𝘦 𝘩𝘰𝘭𝘥𝘴 𝘢 𝘔𝘢𝘴𝘵𝘦𝘳 𝘰𝘧 𝘗𝘩𝘪𝘭𝘰𝘴𝘰𝘱𝘩𝘺 𝘪𝘯 𝘋𝘦𝘷𝘦𝘭𝘰𝘱𝘮𝘦𝘯𝘵 𝘍𝘪𝘯𝘢𝘯𝘤𝘦 𝘧𝘳𝘰𝘮 𝘚𝘵𝘦𝘭𝘭𝘦𝘯𝘣𝘰𝘴𝘤𝘩 𝘜𝘯𝘪𝘷𝘦𝘳𝘴𝘪𝘵𝘺 - 𝘚𝘰𝘶𝘵𝘩 𝘈𝘧𝘳𝘪𝘤𝘢, and 𝘈𝘊𝘊𝘈 - 𝘜𝘒. 𝘚𝘶𝘴𝘪𝘬𝘶 𝘪𝘴 𝘢𝘭𝘴𝘰 𝘢 𝘊𝘦𝘳𝘵𝘪𝘧𝘪𝘦𝘥 𝘌𝘹𝘱𝘦𝘳𝘵 𝘪𝘯 𝘚𝘶𝘴𝘵𝘢𝘪𝘯𝘢𝘣𝘭𝘦 𝘍𝘪𝘯𝘢𝘯𝘤𝘦 𝘸𝘪𝘵𝘩 𝘍𝘳𝘢𝘯𝘬𝘧𝘶𝘳𝘵 𝘚𝘤𝘩𝘰𝘰𝘭 𝘰𝘧 𝘍𝘪𝘯𝘢𝘯𝘤𝘦 𝘢𝘯𝘥 𝘔𝘢𝘯𝘢𝘨𝘦𝘮𝘦𝘯𝘵, 𝘎𝘦𝘳𝘮𝘢𝘯𝘺.

DISCLAIMER

Personal Views

The views and opinions expressed in this article are solely those of the author in their personal capacity. They do not represent, reflect, or purport to reflect the views, positions, policies, or official stance of EY Zambia / EY Advisory Services Limited (EY), its Partners, affiliates, or employees.