By: ThinkBusiness Africa
The Zambian government has officially abandoned plans to seek an extension for its $1.7 billion International Monetary Fund (IMF) loan program, confirming that the current arrangement will expire as scheduled on January 30, 2026.
The announcement, confirmed by the Fund on Wednesday, marks a definitive end to the three-year Extended Credit Facility (ECF) that served as the backbone of Zambia’s recovery after its 2020 sovereign default.
The decision is a notable reversal for President Hakainde Hichilema’s administration. Just six months ago, the Zambian Cabinet had signaled its intent to request a 12-month extension through 2026 to “lock in” fiscal reforms ahead of the upcoming August 2026 general elections.
However, following a successful three-month “bridge” extension granted in September 2025, Treasury officials now indicate that the country is ready to move beyond the formal program.
“Zambia has demonstrated the necessary fiscal discipline and reached a staff-level agreement on the sixth and final review,” IMF stated. “The authorities have expressed confidence in their ability to maintain macroeconomic stability independently.”
The conclusion of the program clears the way for a final disbursement of approximately $190 million (SDR 138.9 million), bringing total IMF support since 2022 to the full $1.7 billion allocation.
As of late 2025, Zambia has successfully restructured approximately 94% of its external debt under the G20 Common Framework.
GDP Growth is projected to hit 5.8% in 2026, a significant rebound from the 2024-2025 drought-induced slowdowns.
While inflation remains high at roughly 14%, the IMF expects it to gradually drift toward the 6–8% target band by 2027.
While the formal loan ends, Zambia will not be entirely on its own. The IMF will transition to Post-Program Monitoring (PPM), a standard procedure for countries with high outstanding credit. This ensures the Fund continues to oversee fiscal policies, which remains a requirement for many of Zambia’s new debt-restructuring agreements with international creditors.
Analysts suggest the move to exit the program may be a political win for the government, allowing it more “sovereign breathing room” in its budget as election season nears, while still riding the wave of investor confidence generated by the IMF’s “seal of approval.”
