After the debt default crisis, Zambia opens a new chapter with the International Monetary Fund.
Why is Zambia postponing the issuance of international bonds despite its improved economy?
Written by Badr Ahmed:
The Zambian government is seeking to reach a new agreement with the International Monetary Fund before the end of this year, in a move aimed at strengthening economic stability and attracting investments, after the country emerged from a sovereign debt default crisis and completed its previous reform program with the Fund.
Zambian Finance Minister Situmbeko Musokotwane told Reuters that the government hopes to reach an agreement with the International Monetary Fund before the end of 2026, stressing that the next phase requires moving from addressing the debt crisis to achieving sustainable economic growth and creating jobs.
Zambia aims for a new agreement with the International Monetary Fund.
The minister explained that the previous IMF program, valued at $1.7 billion and which ended last January, played a pivotal role in supporting Zambia’s external debt restructuring efforts, noting that the government is now seeking a new program that focuses on stimulating investment in productive sectors.
Mosokotwane added that the anticipated program will focus on directing investments towards the mining, energy and agriculture sectors, as they are the main drivers of economic growth, especially in light of the large increase in the population since the country’s independence, and the resulting growing need to provide job opportunities and improve living standards.
The finance minister stressed that it was still too early for Zambia to issue new Eurobonds in international markets, explaining that the government preferred to first strengthen its cooperation with the International Monetary Fund and rebuild investor confidence before resorting to global debt markets for new financing.
The International Monetary Fund announced, following a technical mission visit to the capital Lusaka between April and May, that talks with the Zambian government on a new program had made progress and would resume after the general elections scheduled for August 13.
Regarding the economic outlook, Mosokotwane pointed to a number of challenges that could affect growth rates, including the possibility of higher fuel prices as a result of geopolitical tensions in the Middle East, as well as the risk of the country being exposed to a new wave of drought that could affect hydroelectric power production.
In contrast, the minister predicted that increasing global demand for copper, along with new investments in the mining sector, would support the Zambian economy in the coming years, stressing that copper would remain the main driver of growth.
The government aims to achieve a growth rate of 6.4% during 2026, while the International Monetary Fund lowered its forecasts to 4.3%, attributing this to a decline in mining production, continued energy constraints, a slowdown in agricultural activity after the exceptional harvest the country witnessed in 2025, as well as the repercussions of regional tensions.
The Minister of Finance concluded by emphasizing that the next government will prioritize reforming the tax system, focusing on improving revenue collection efficiency without imposing new tax burdens on citizens or investors, within a plan aimed at enhancing financial sustainability and supporting economic growth.
