Zambia eyes a new IMF programme after August polls

Analysis

LUSAKA — A successor IMF programme after the 13 August election is what Secretary to the Treasury Felix Nkulukusa says Zambia is confident of securing.

Nkulukusa said the government expects to clinch a successor arrangement with the International Monetary Fund (IMF) once the polls are past. The framing is deliberate: a new programme is being lined up for after the vote, not before it. For a country still consolidating a post-default fiscal path, the continuity of an IMF anchor is the variable lenders, ratings agencies and investors watch most closely — and the read here is that continuity, not rupture, is the base case.

What the current programme did

Zambia's existing arrangement with the IMF is an Extended Credit Facility, the concessional lending instrument the Fund uses for low-income countries. The data shows it has anchored the country's recovery since the 2020 default: it underpinned the debt restructuring with official and private creditors, set the fiscal targets, and unlocked parallel financing from the World Bank and African Development Bank.

Research from the programme reviews shows the conditionality has been demanding — primary-surplus targets, subsidy reform, arrears clearance and revenue measures. The analysis is that the programme worked as a credibility device: it gave creditors a reason to restructure and gave the government an external commitment to discipline. A successor programme would extend that anchor into the next political term.

We're confident of clinching an IMF successor programme after the polls.

— Felix Nkulukusa, Secretary to the Treasury, in public remarks on Zambia's fiscal path, May 2026

Why the timing is after the vote

Negotiating a new multi-year IMF programme through an election is impractical, and the framing reflects that. A successor arrangement commits the government to fiscal targets that span the next term, which means the administration that negotiates it should be the one with a mandate to deliver it. Sequencing the programme after the vote aligns the commitment with the mandate.

There is a market-signalling dimension. Analysis of sovereign-credit behaviour shows the gap between one programme ending and the next beginning is a window of uncertainty — exactly when yields can drift wider. By stating the intent publicly now, the Treasury is trying to keep that window narrow and reassure holders of Zambian debt that the anchor is not being abandoned with the election.

The continuity question

The deeper issue is political continuity of economic policy. The read here is that whoever wins on 13 August inherits the same fiscal arithmetic — a restructured debt stock with a repayment schedule, IMF targets and limited room to loosen. A successor programme is, in effect, a commitment that the post-election government will stay on the consolidation path regardless of campaign rhetoric.

Evidence from comparable post-default economies demonstrates the danger is a post-election loosening — a new or returning administration spending to reward supporters, blowing the fiscal targets and forcing a renegotiation. The data shows the countries that avoided that trap treated the IMF programme as bipartisan economic infrastructure rather than one government's project. Whether Zambia does the same is the question the successor programme will answer.

Frequently Asked Questions

These are the questions Zambian readers have been asking about the prospect of a successor IMF programme. Short answers follow, drawn from public Treasury statements and IMF programme documentation.

What is an IMF successor programme?

In short, a successor programme is a new IMF arrangement that follows an expiring one. The answer is that it extends the fiscal anchor, the conditionality and the parallel financing into a new multi-year period. The key is that it signals continuity rather than a clean exit from IMF support.

How did the current programme help Zambia?

Simply put, the Extended Credit Facility anchored the recovery from the 2020 default. Research from the programme reviews shows it underpinned the debt restructuring, set fiscal targets and unlocked World Bank and AfDB financing. The data shows it functioned as a credibility device for creditors.

Why negotiate after the election?

The answer is mandate alignment. In other words, a multi-year programme commits the government to targets across the next term, so the administration with the mandate should negotiate it. Evidence from sovereign-credit behaviour shows public intent now helps keep the inter-programme uncertainty window narrow.

Who leads the negotiation?

The key is the Treasury and the central bank. According to standard practice, the Ministry of Finance and the Bank of Zambia lead IMF negotiations jointly. Research from prior programmes shows the Secretary to the Treasury is a central figure in the technical talks.

What is the main risk?

Analysis of post-default economies shows the main risk is a post-election fiscal loosening that blows the targets and forces renegotiation. Evidence demonstrates the economies that avoided it treated the IMF anchor as bipartisan infrastructure rather than one government's project.

What to watch

Two signals. The first is whether the current programme's final review concludes cleanly before the election, which sets up the successor talks. The second is the post-election fiscal stance — the first budget after 13 August will reveal whether the consolidation path holds or whether the successor programme starts from a position of slippage.

Sources

Public remarks by Secretary to the Treasury Felix Nkulukusa on Zambia's fiscal path, May 2026. International Monetary Fund — Zambia. Ministry of Finance and National Planning. Kwacha News earlier coverage: IMF to Zambia: restore TAZAMA open access.