ZAMBIA TO RECEIVE US$1.5 BILLION IMF LOAN UNDER NEW THREE-YEAR FINANCING DEAL Zambia is expected to access approximately US$1.5 billion in financing from the International Monetary Fund (IMF) over three years under a new lending arrangement, with the funds expected to be disbursed every six months at zero interest. Although the financing carries no interest, […]

ZAMBIA TO RECEIVE US$1.5 BILLION IMF LOAN UNDER NEW THREE-YEAR FINANCING DEAL

Zambia is expected to access approximately US$1.5 billion in financing from the International Monetary Fund (IMF) over three years under a new lending arrangement, with the funds expected to be disbursed every six months at zero interest.

Although the financing carries no interest, it remains a loan that Zambia is expected to repay in accordance with the agreed terms, adding to the country’s broader debt obligations.

The programme is intended to support Zambia’s economic recovery, strengthen macroeconomic stability and promote sustainable improvements in people’s living standards.

Speaking during a joint press briefing with the Ministry of Finance, IMF Mission Chief for Zambia Edward Gemayel said the arrangement would build on progress made in stabilising the economy and support the country’s medium-term economic objectives.

Mr Gemayel said the IMF estimates Zambia’s potential economic growth at between 5 and 5.5 percent, with the possibility of stronger performance depending on investment levels and the pace of economic transformation.
The IMF projects Zambia’s economy to grow by approximately 5.6 percent in 2026, with growth expected to remain above five percent over the medium term.

On the external front, the Fund wants Zambia to continue building its foreign exchange reserves, maintain low and stable inflation, and allow exchange-rate flexibility to help the economy withstand external shocks.
The programme is also expected to strengthen public debt management, improve transparency through the publication of debt statistics and enhance the planning of government borrowing.

Meanwhile, Finance Minister Situmbeko Musokotwane said the proposed IMF programme would help strengthen Zambia’s foreign exchange reserves and improve the country’s capacity to withstand economic shocks.
Dr Musokotwane said the funds expected under the arrangement would complement the Government’s own efforts to build reserves, leaving the country better positioned to respond to future economic challenges.

However, while the zero-interest arrangement may reduce the cost of borrowing, the US$1.5 billion should not be mistaken for a grant or free money. It is financing extended to Zambia as a loan, meaning the country will still have a repayment obligation.