Zambia will pursue a new financing programme with the International Monetary Fund (IMF) after deciding not to extend its existing Extended Credit Facility (ECF), which expires at the end of January 2026, Finance Minister Situmbeko Musokotwane announced this week.
- •The government had initially planned to request a one-year extension of the current IMF arrangement- worth roughly US$ 145 million in additional funding- but reversed the course and withdrew the request, opting instead to negotiate a fresh programme once the current one formally expires.
- •According to the Finance Ministry, this shift reflects the successful completion of all reviews and performance benchmarks under the existing facility, rather than a breakdown in relations with the IMF or a retreat from reform commitments.
- •Musokotwane emphasized that the successor IMF programme will build on progress made since Zambia entered the Extended Credit Facility in 2022- a programme designed to help the nation restore debt sustainability following its 2020 sovereign default.
Zambia’s dollar-denominated bonds initially dipped on the news before partially recovering, while the kwacha extended gains, supported by expectations of continued macroeconomic stability.
The country is entering a critical period of economic and political transition, with general elections scheduled for August 2026 and ongoing pressures from persistently high inflation and public demand for improved living standards.
Economists say that a new IMF programme could provide an anchor for fiscal discipline and investor confidence, but its timing and conditionality will likely require careful navigation amid election-year dynamics. Negotiations are expected to conclude in the first half of 2026, with both sides keen to demonstrate continuity in economic reforms and debt management.
