## IMF Staff Completes Mission to Zambia

_IMF News, May 16, 2025_

## Source details

**Canonical URL:** [IMF Staff Completes Mission to Zambia](https://www.imf.org/en/news/articles/2025/05/16/pr25151-zambia-imf-staff-completes-mission)

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## Bibliographic details
- Published: May 16, 2025

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### Mission overview and purpose
- Press Release No. 25/151; May 16, 2025.
- IMF mission led by Ms. Vera Martin visited Lusaka from April 29 to May 13, 2025.
- Purpose: advance technical work and policy discussions underpinning the Fifth Review under the IMF Extended Credit Facility (ECF) arrangement and conduct discussions under the 2025 Article IV Consultation.
- Statement clarifies that end-of-mission press releases convey preliminary findings of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.

### Key economic findings and outlook
- Zambia’s recovery is gaining pace, with growth set to strengthen in 2025.
- Growth drivers identified:
  - An anticipated rebound in agriculture.
  - A pickup in mining activity.
- Risks to the rebound:
  - Slow recovery in electricity generation and electricity shortages could undermine the recovery, highlighting the need for sustained reforms in the energy sector.
  - External downside risks from subdued global demand, elevated commodity price volatility, and declining official development support.
- Inflation outlook:
  - Inflation is projected to gradually decline over the course of the year, reflecting expected easing in food and fuel prices.
  - Recommendation: The Bank of Zambia should continue to maintain a data-driven and forward-looking monetary policy stance to bring inflation on a downward trend towards the inflation band while supporting macroeconomic stability.

### Fiscal position and risks
- Fiscal performance:
  - The fiscal primary balance in 2024, estimated at 2.9 percent of GDP, outperformed expectations, marked by constrained financing and spending compression.
- Emerging 2025 pressures:
  - Rising debt service and social spending needs are creating spending pressures in 2025.
- Revenue and financing priorities:
  - Mobilizing domestic revenues, in the context of constrained financing conditions, remains critical to preserving fiscal and debt sustainability and safeguarding priority social and infrastructure spending.
- Public financial management and tax policy:
  - Authorities committed to improving public financial management and fiscal transparency, while enhancing tax administration.
  - Recommended reforms: reduce tax expenditures, make the tax regime more progressive, and improve expenditure controls to build additional fiscal resilience.

### Policy recommendations and reform priorities
- Continue discussions to reach a staff-level agreement on the Fifth Review, including addressing new spending needs and allowing Zambia to respond to emerging challenges while restoring debt sustainability.
- Strengthen buffers and accelerate structural reform implementation to sustain progress in a volatile environment.
- Maintain reform momentum to:
  - Build resilience.
  - Create fiscal space.
  - Crowd in private investment.
- Prioritized structural reforms to accelerate:
  - Energy sector.
  - Governance.
  - Public procurement.
  - Business environment.
- Monetary policy:
  - The Bank of Zambia should maintain a data-driven and forward-looking stance to reduce inflation toward the inflation band and support macroeconomic stability.

### Engagement and consultations
- During the visit, IMF staff met with:
  - His Excellency President Hakainde Hichilema;
  - Minister of Finance and National Planning, Dr. Situmbeko Musokotwane;
  - Governor of the Bank of Zambia, Dr. Denny Kalyalya;
  - Secretary to the Treasury, Felix Nkulukusa;
  - Deputy Governor, Dr. Francis Chipimo;
  - Senior government officials;
  - Representatives of the private sector, civil society organizations, and development partners.
- Next steps:
  - Discussions will continue in the coming weeks to finalize the policies and reforms underpinning the Fifth Review.
  - Staff will prepare a report, subject to management approval, to be presented to the IMF's Executive Board for discussion and decision.

*International Monetary Fund*

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## References

- [Zambia and the IMF](http://www.imf.org/external/country/ZMB/index.htm)
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- [PRESS CENTER](http://presscenter.imf.org/)
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_Source: https://www.imf.org/en/news/articles/2025/05/16/pr25151-zambia-imf-staff-completes-mission_