Zambia eyes a new IMF deal after the vote as growth rebounds

Analysis

LUSAKA — Zambia’s next big economic decision is being parked until after the 13 August vote: a new IMF programme the government wants sealed before the year is out, even as growth rebounds.

The read here: the hard part of Zambia’s crisis — a sovereign default and a four-year debt workout — is largely behind it, and the numbers going into the election are the best in years. What comes next is a choice about the shape of the recovery, and the government has been explicit that the choice waits until Zambians have voted.

What the finance minister said

Finance Minister Situmbeko Musokotwane told Reuters on 16 July that the government wants a new arrangement with the International Monetary Fund agreed before the end of 2026, arguing that investors are more comfortable when a Fund programme is in place. An IMF staff team visited Lusaka in April and May, and the talks resume after the election.

The pitch rests on a genuinely improved backdrop. Zambia’s economy grew 7.7% in the first quarter of 2026 compared with a year earlier, up from 4.5% in the same quarter of 2025, led by a 21.4% jump in agriculture, forestry and fishing, according to the Zambia Statistics Agency. Inflation eased to 6.5% in June, inside the 6–8% target band, and the Bank of Zambia has cut its policy rate to 13.25%. Kwacha News set out the wider picture in its report on the economic stakes of the vote.

Our wish is that certainly before the end of the year, we should have agreed with the Fund.

— Finance Minister Situmbeko Musokotwane, via <a href="https://www.polity.org.za/article/zambia-hopes-to-agree-new-imf-programme-by-year-end-finance-minister-says-2026-07-16">Reuters, 16 July 2026</a>

Why it matters

What this means: the last IMF programme was about survival — restructuring debt and stabilising the currency. The Extended Credit Facility that ran for 38 months closed in January 2026 with a final tranche, having disbursed about US$1.7 billion. The next one, on Musokotwane’s framing, would be about credibility and investment — a seal of approval that lowers borrowing costs and reassures the funds Zambia wants back in its bond market. Kwacha News has tracked that return of confidence in its coverage of investor appetite for Zambian assets.

There is a tension worth watching. The Bank of Zambia trimmed its 2026 growth forecast earlier in the year, yet the first-quarter actual came in strong at 7.7%. Whether that pace holds — or whether a weak rainy season or a softer copper price pulls it back — will shape how much leverage Lusaka carries into the IMF talks. A government negotiating from strength asks for different terms than one negotiating from need.

The debt side is nearly settled. In June, Zambia completed a US$1.36 billion buyback of a 2053 Eurobond, with 97.85% of the principal tendered, funded by a US$600 million African Development Bank loan and its own resources, with up to US$275 million over 15 years earmarked for the power grid. That closes off much of the restructuring overhang and clears the ground for a forward-looking programme.

Background

Zambia became the first African country to default in the pandemic era in 2020, and spent the following years negotiating relief under the G20 Common Framework. Research into that process shows it was slow and contested, but it has largely concluded, leaving the country with a lighter near-term debt load and a functioning IMF relationship. The election is therefore the first national vote of the post-restructuring era, and the economic argument on the ballot is about what to do with recovered stability.

What to watch

The next hard data point is the July inflation print, due at the end of the month, days before the vote. After that, the signals are the resumption of IMF talks, the copper price, and the rains. For readers, the number to watch is whether growth holds near its first-quarter pace once the harvest and the power position are known. This story is part of Kwacha News’s business and economy coverage.

Frequently Asked Questions

These are the questions readers have been asking about Zambia’s economy before the vote. Short answers follow, drawn from Reuters reporting and official data.

What is the new IMF programme Zambia wants?

In short, it is a fresh arrangement with the International Monetary Fund that the government hopes to agree before the end of 2026. The answer, simply put, is that it would follow the previous facility, which closed in January. The key is that talks resume only after the 13 August election.

How does an IMF programme help Zambia?

Research into the government’s case shows a Fund programme is treated by markets as a seal of approval. Data from the recovery reveals it can lower borrowing costs and draw investors back. According to Finance Minister Musokotwane, investors feel more comfortable when a programme is in place.

Why is the decision delayed until after the election?

The answer is that the government has chosen to resume talks only once voters have decided. Evidence from the timeline shows an IMF team visited in April and May, then paused. In other words, the programme is a post-election choice, not a pre-election commitment.

Who is negotiating for Zambia?

Simply put, the Ministry of Finance and National Planning, led by Minister Situmbeko Musokotwane, alongside the Bank of Zambia. According to Reuters, Musokotwane is the public voice on the IMF timeline. The data shows the central bank sets the monetary backdrop through its policy rate.

What are the risks to the outlook?

Analysis of the position reveals two durable risks. The first is weather: research shows a weak rainy season would hit agriculture, the sector driving growth. The second is copper: evidence from the budget shows a softer price would cut revenue. Each risk is structural for a rain-fed, copper-dependent economy.

Sources

Reuters (via Polity): Zambia hopes to agree new IMF programme by year-end, 16 July 2026. Zambia Statistics Agency: economy expands by 7.7% in Q1 2026. IMF: final ECF review, 27 January 2026.