{
  "title": "IMF Executive Board Completes Second Review Under the Extended Credit Facility for Zambia and Approves US$187 Million Disbursement",
  "publication": "IMF News, December 20, 2023",
  "sourceUrl": "https://www.imf.org/en/news/articles/2023/12/20/pr23468-zambia-imf-exec-board-completes-2nd-rev-ecf-approves-us187m-disbursement",
  "canonical": "https://www.imf.org/en/news/articles/2023/12/20/pr23468-zambia-imf-exec-board-completes-2nd-rev-ecf-approves-us187m-disbursement",
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  "summary": "The IMF Executive Board completed the second review under the 38-month Extended Credit Facility (ECF) Arrangement with Zambia, providing the country with immediate access to about US$187 million",
  "publishDate": "2023-12-20",
  "sections": [
    {
      "heading": "Program review and disbursement",
      "content": "- The Executive Board completed the second review of the 38-month Extended Credit Facility (ECF) Arrangement for Zambia.\n- Completion of the second review allows for an immediate disbursement of SDR 139.88 million (about US$187 million).\n- The disbursement brings Zambia’s total disbursement under the ECF to SDR 419.64 million (about US$561 million).\n- Zambia’s ECF Arrangement was adopted on August 31, 2022, for a total of SDR 978.2 million (100 percent of quota, about US$1.3 billion).\n- The ECF supports Zambia’s 8th National Development Plan objectives: entrench macroeconomic stability, attain debt and fiscal sustainability, foster inclusive growth, and improve livelihoods, especially for the vulnerable."
    },
    {
      "heading": "Program performance and conditionality",
      "content": "- Overall program performance: satisfactory despite a challenging domestic and global environment.\n- Quantitative performance criteria: All but one quantitative performance criteria for the second review were met.\n  - The authorities requested a waiver of nonobservance for missing the end-June 2023 net international reserve target as they have put in place corrective measures.\n- Structural conditionality: Four out of seven structural benchmarks were met; two others were completed with minor delays.\n- Debt treatment and creditor engagement:\n  - The authorities agreed on a Memorandum of Understanding (MoU) with the Official Creditor Committee (OCC) on October 14, 2023, reflecting the June 2023 debt treatment agreement and consistent with IMF program parameters.\n  - The authorities remain committed to reaching an agreement with private external creditors that respects comparability of treatment (CoT) as defined by the OCC and is consistent with IMF program parameters.\n  - The IMF statement emphasizes that prompt implementation of the MoU and agreement with private creditors on comparable terms are critical to restore debt sustainability over the medium term."
    },
    {
      "heading": "Economic performance and outlook",
      "content": "- Growth:\n  - Real GDP growth: 6.2 (2021), 5.2 (2022), 4.3 (2023), 4.7 (2024, proj.), 4.8 (2025, proj.).\n  - Growth was revised upwards to 4.3 percent in 2023 due to strong performance in the non-agricultural and non-mining sectors, despite weakened mining production.\n- Inflation:\n  - Inflation annual average: 22.0 (2021), 11.0 (2022), 11.4 (2023), 7.8 (2024, proj.).\n  - Inflation end-of-year: 16.4 (2021), 9.9 (2022), 13.0 (2023), 8.6 (2024, proj.), 7.0 (2025, proj.).\n- Public finances (central government):\n  - Revenue (% GDP): 22.4 (2021), 20.4 (2022), 20.9 (2023), 21.2 (2024, proj.), 21.9 (2025, proj.).\n  - Expenditure (% GDP): 30.5 (2021), 28.2 (2022), 27.7 (2023), 27.4 (2024, proj.), 27.3 (2025, proj.).\n  - Fiscal balance (cash basis, % GDP): -8.1 (2021), -7.8 (2022), -6.8 (2023), -6.1 (2024, proj.), -5.4 (2025, proj.).\n  - Fiscal balance (commitment basis, % GDP): -13.9 (2021), -6.4 (2022), -3.8 (2023), -3.3 (2024, proj.).\n  - Public debt (% GDP): 112.1 (2021), 110.9 (2022), … (2023).\n- Money and credit:\n  - Broad money (% change): 3.7 (2021), 24.5 (2022), 18.4 (2023), 15.6 (2024, proj.).\n  - Credit to private sector (% change): 34.2 (2021), 31.4 (2022), 26.8 (2023), 22.6 (2024, proj.).\n  - 3-month Treasury bill interest rate (%): 12.8 (2021), 9.6 (2022).\n- Balance of payments and external sector:\n  - Current account (% GDP): 9.7 (2021), -1.8 (2022).\n  - FDI (% GDP): 3.1 (2021), 1.2 (2022), 1.3 (2023), 2.0 (2024, proj.), 2.9 (2025, proj.).\n  - Reserves (in months of imports): 3.3 (2021), 3.4 (2022), 4.0 (2023), 5.0 (2024, proj.).\n  - REER (% change): 30.3 (2021).\n- Sources for indicators: Zambian authorities, and IMF Staff estimates and projections."
    },
    {
      "heading": "Policy recommendations, central bank and governance measures",
      "content": "- Fiscal policy:\n  - Sustain fiscal consolidation to safeguard macroeconomic stability.\n  - Scale up revenue mobilization, including broadening the tax base and removing exemptions, to preserve social spending, clear domestic arrears, and address development needs.\n  - Public financial management reforms to enhance budget execution and the quality of government spending.\n- Debt and creditor engagement:\n  - Prompt implementation of the MoU with official bilateral creditors.\n  - Reach agreement with private creditors consistent with the program’s parameters and comparability of treatment.\n- Monetary and exchange rate policy:\n  - The Bank of Zambia stands ready to tighten monetary policy further to ensure inflation falls within the monetary policy band.\n  - Maintain exchange rate flexibility and step up the pace of reserve accumulation to strengthen external resilience.\n- Financial sector and inclusion:\n  - Continue financial sector reforms to promote financial stability and inclusion.\n- Governance and structural reforms:\n  - Enhance procurement, disclose beneficiary ownership, enhance access to public information, and combat corruption to foster private investment and inclusive growth.\n  - Integrate climate mitigation and adaptation strategies into national policies.\n\nIMF Executive Board Completes Second Review Under the Extended Credit Facility for Zambia and Approves US$187 Million Disbursement (Press Release No. 23/468, December 20, 2023).\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Zambia FAQ Page\n- Zambia and the IMF\n- Press Releases\n- PRESS CENTER\n- Extended Credit Facility\n- ECF Arrangement\n- June 2023 debt treatment agreement,\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2023/12/20/pr23468-zambia-imf-exec-board-completes-2nd-rev-ecf-approves-us187m-disbursement"
    }
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    "Published: December 20, 2023",
    "The Executive Board completed the second review of the 38-month Extended Credit Facility (ECF) Arrangement for Zambia.",
    "Completion of the second review allows for an immediate disbursement of SDR 139.88 million (about US$187 million).",
    "The disbursement brings Zambia’s total disbursement under the ECF to SDR 419.64 million (about US$561 million).",
    "Zambia’s ECF Arrangement was adopted on August 31, 2022, for a total of SDR 978.2 million (100 percent of quota, about US$1.3 billion).",
    "The ECF supports Zambia’s 8th National Development Plan objectives: entrench macroeconomic stability, attain debt and fiscal sustainability, foster inclusive growth, and improve livelihoods, especially for the vulnerable.",
    "Overall program performance: satisfactory despite a challenging domestic and global environment.",
    "Quantitative performance criteria: All but one quantitative performance criteria for the second review were met.",
    "Structural conditionality: Four out of seven structural benchmarks were met; two others were completed with minor delays.",
    "Debt treatment and creditor engagement:",
    "Growth:",
    "Inflation:",
    "Public finances (central government):",
    "Money and credit:",
    "Balance of payments and external sector:",
    "Sources for indicators: Zambian authorities, and IMF Staff estimates and projections.",
    "Fiscal policy:",
    "Debt and creditor engagement:",
    "Monetary and exchange rate policy:",
    "Financial sector and inclusion:",
    "Governance and structural reforms:",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[Zambia FAQ Page](https://www.imf.org/en/Countries/ZMB/zambia-qandas)",
    "[Zambia and the IMF](http://www.imf.org/external/country/ZMB/index.htm)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[Extended Credit Facility](https://www.imf.org/en/About/Factsheets/Sheets/2023/Extended-Credit-Facility-ECF)",
    "[ECF Arrangement](https://www.imf.org/en/News/Articles/2022/08/31/pr22297-imf-executive-board-approves-new-extended-credit-facility-arrangement-for-zambia)",
    "[June 2023 debt treatment agreement,](https://www.imf.org/en/News/Articles/2023/06/22/pr23235-imf-welcomes-debt-treatment-agreement-reached-by-zambia)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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