Zambia Turns to IMF for New Growth Program After Debt Crisis Recovery

Zambia is seeking a new agreement with the International Monetary Fund (IMF) by the end of 2026 as the country shifts its focus from debt restructuring to attracting investment, creating jobs, and rebuilding long-term economic growth.

Finance Minister Situmbeko Musokotwane said the government hopes to reach a deal with the Fund for a new support program later this year, emphasizing that Zambia's next phase requires policies aimed at expanding economic activity rather than simply managing the aftermath of its debt crisis.

"We need to do more than just emerge from the debt crisis. We now need to attract investment to achieve growth and create jobs," Musokotwane told Reuters, adding that the presence of an IMF-backed program could provide greater confidence for investors.

Zambia defaulted on its sovereign debt in 2020, becoming the first African country to suspend debt payments during the COVID-19 pandemic, triggering one of the most severe financial crises in its modern history.

In 2022, the country secured a $1.7 billion IMF financing program linked to fiscal reforms, economic restructuring, and efforts to restore financial stability through a comprehensive debt restructuring process.

In January 2026, the IMF Executive Board approved the final review of the program, allowing the release of an additional $190 million financing tranche and marking the successful completion of the agreement.

The Zambian government has said it does not intend to extend the existing program but instead wants to negotiate a new framework designed for the country's post-crisis development priorities.

An IMF mission visited Lusaka between April and May to discuss the potential new program, with officials reporting progress in negotiations. Talks are expected to continue after Zambia's general elections scheduled for August.

Government officials believe a new IMF agreement would strengthen investor confidence, particularly as Zambia seeks financing for infrastructure projects, private-sector expansion, and employment creation following years of economic pressure.

The negotiations come as Zambia places renewed emphasis on its mining sector, particularly copper, as a key driver of future economic growth.

Zambia is one of Africa's largest copper producers and is seeking to significantly increase output in coming years to capitalize on rising global demand for critical minerals used in electric vehicles, power networks, and clean energy projects.

The government is also working to attract new investment into mining, energy, and infrastructure, supported by improvements in public finances following progress in restructuring debt obligations with official and private creditors.

Analysts say continued cooperation with the IMF could provide Zambia with a stronger policy framework, reduce borrowing costs, improve creditworthiness, and reassure investors about the government's commitment to fiscal reforms.