Zambia Eyes Steadier Finances: IMF Staff Agree KSh 190.6B Three-Year Loan DealZambia Eyes Steadier Finances: IMF Staff Agree KSh 190.6B Three-Year Loan Deal

The agreement covers a 36-month Extended Credit Facility of 1,076 million Special Drawing Rights, the IMF's own unit of account, equivalent to about KSh 190.6B ($1.47B). The IMF said on 9 October that the deal depends on board approval and on Zambia carrying out agreed prior actions. The release gives no date for the board meeting.

A staff-level agreement is a deal between IMF negotiators and a government, not a final loan. For ordinary Zambians and for investors holding Zambian debt, the signal matters because an IMF programme usually shapes tax policy, spending and how readily other lenders return.

What Zambia has promised to do

The IMF says the programme "would support Zambia's efforts to safeguard macroeconomic stability and debt sustainability". It also aims to rebuild government and external financial cushions and to promote growth led by the private sector.

The fiscal plan is specific. Zambia would raise its primary surplus, the budget balance before interest payments, to 3% of gross domestic product (GDP) by 2029, starting in 2027. The IMF says this would come mainly from new revenue measures and from trimming tax exemptions.

Two other steps stand out. The government would reverse temporary fuel-tax relief and cut capital spending judged to be low priority, without building up new arrears, which are bills the state owes but has not paid. It would also tighten oversight of the Food Reserve Agency, state-owned enterprises, public-private partnerships and payment arrears.

The release says the fiscal position weakened in 2026 because VAT and fuel-tax revenue fell short and the Food Reserve Agency spent more than budgeted. Reversing fuel-tax relief could mean higher pump prices for motorists and transport firms, although the IMF release does not say how large any change would be.

The economy Zambia is bringing to the table

The fund projects real GDP growth of 5.6% in 2026, driven by agriculture, mining and exports. Inflation fell to 6.1% in September, inside the Bank of Zambia's target range, and gross international reserves reached KSh 789.9B ($6.1B) the same month.

The IMF presents the programme as a way to safeguard that stability. The release does not give a debt figure, so readers should not assume the programme changes Zambia's debt position on its own.

Copper remains central to the story. As Mwenendo earlier reported on how junior miners hunt copper in the Copperbelt, exploration money keeps flowing to the country. In an earlier report by Mwenendo, a narrowing monthly trade surplus showed how exposed Zambian trade is to export swings.

Zambia's board vote and prior actions

The first test is the board date. IMF staff will prepare a report, subject to management approval, for directors to consider. Until then, the deal is an agreement in principle.

The second test is the prior actions. The IMF has not listed them in the release, and they will shape how quickly Zambia can draw funds. As Mwenendo earlier reported on how the IMF lending cycle works, money is normally released in phases as targets are met, so the full amount does not arrive at once.

The third is the 2027 budget. Zambia will have to show how it plans to lift revenue and cut exemptions without choking the growth the IMF is forecasting. Dollar figures in this report are converted at recent exchange rates and may differ slightly from the final amounts.