Zambia is moving to lock in a new IMF programme before year-end, marking a deliberate shift from crisis management toward growth strategy as the country builds on its exit from sovereign debt default. Finance Minister Situmbeko Musokotwane told Reuters the government’s wish was to have reached agreement with the Fund certainly before the year is out, a timeline that would close the gap left when the previous $1.7 billion arrangement, which underpinned Zambia’s landmark debt restructuring, concluded in January.
What distinguishes this next programme from the last is its stated purpose. Zambia needs to do more than simply get out of the debt crisis, Musokotwane said, framing the priority now as attracting investment so that growth takes place and jobs are created. The new programme is expected to focus on channelling capital into mining, energy and agriculture, sectors capable of absorbing employment for a population that has grown sevenfold since independence.
On timing for a return to international capital markets, Musokotwane was cautious as it remains too soon for Zambia to return to international bond markets, with the government prioritising a cemented relationship with the Fund and rebuilding investor confidence first. This year between April and May an IMF staff team visited Lusaka and the Fund has confirmed discussions have advanced and will continue following the August general election, putting the political calendar directly in the path of the programme timeline.
On the growth outlook, Musokotwane pointed to surging global copper demand and a wave of new mining investment as the key tailwinds, even as he acknowledged risks from fuel prices and possible drought. Demand for metals including copper is going to give Zambia a big surge in growth in the coming few years, he said, a statement that puts the country’s near-term growth trajectory squarely in the hands of global copper markets.
Looking past the current administration, Musokotwane flagged tax reform as the next priority, with a clear preference for efficiency over new burdens. The government has to push hard on more tax revenue collection, he said, not by imposing new taxes but by encouraging and pushing through higher efficiency, a framing that suggests fiscal consolidation, not fresh taxation, will define Zambia’s next phase of reform regardless of who wins August’s election.
