## IMF Staff Completes Mission to Zambia

_IMF News, October 17, 2024_

## Source details

**Canonical URL:** [IMF Staff Completes Mission to Zambia](https://www.imf.org/en/news/articles/2024/10/16/pr24374-zambia-imf-staff-completes-mission)

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## Bibliographic details
- Published: October 17, 2024

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### Mission details
- IMF team visited Lusaka from October 2-15 to discuss recent economic and financial developments and policies underpinning the Fourth Review of the IMF Extended Credit Facility (ECF).
- Mission led by Ms. Mercedes Vera Martin.
- IMF staff met with: His Excellency President Hakainde Hichilema; Minister of Finance and National Planning Situmbeko Musokotwane; Governor Denny Kalyala; Secretary to the Treasury Felix Nkulukusa; Deputy Governor Francis Chipimo; other senior government officials; representatives of the private sector; and development partners.
- End-of-mission statement issued October 17, 2024.

### Economic impact and outlook
- The economic impact of the drought has been greater than anticipated due to the intense electricity shortages (prolonged power outages and load shedding), notably hindering growth in the non-mining sector.
- Growth projections:
  - Growth in 2024 is projected at 1.2 percent, from 2.3 percent previously.
- Inflation outlook:
  - Inflation is expected to continue increasing due to past kwacha depreciation, increasing food and fuel prices, and hikes in administrative prices.
- External sector and reserves:
  - Subdued import demand has helped reduce volatility in the kwacha and support reserve accumulation.
- Fiscal performance:
  - Fiscal performance has been stronger than initially envisaged due to lower domestic financing and proactive spending reprioritization.

### Policy discussions and recommendations
- Discussions focused on:
  - Assessing the economic impact of the drought.
  - Updating the economic outlook.
  - Assessing policies and reform efforts to support growth and the Fourth Review under the ECF.
- Mission emphasis on policy priorities:
  - Prioritize progressive revenue measures to strengthen fiscal buffers and support debt sustainability.
  - Key initiatives highlighted:
    - Improved tax administration.
    - Streamlined tax exemptions.
    - Enhanced tax compliance.
  - Advance energy and governance reforms.
  - Continue efforts to level the playing field to promote private sector-led growth that will generate jobs.
  - Agile monetary policy to help bring inflation down while supporting the economic recovery in 2025.

### Social measures and program implementation
- Authorities have scaled up social measures in response to the drought and shocks:
  - Scaled up social cash transfers.
  - Implemented a cash-for-work program.
  - Expanded free school lunch programs.
- Despite challenging conditions, the Zambian authorities have made progress in implementing reforms under the Fund-supported program.

### Next steps and engagement
- Discussions to assess policies to support the economic recovery and the completion of the ECF review will continue in the coming weeks, including during the upcoming 2024 IMF-World Bank Annual Meetings.
- The IMF remains a committed partner to Zambia and will continue working with the authorities to develop strategies to tackle the country's current economic challenges.

*Statement by IMF staff at the end of the mission; views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.*

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## References

- [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/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2024/10/16/pr24374-zambia-imf-staff-completes-mission_