The Editor Zambia
The International Monetary Fund IMF’s latest assessment of Zambia’s economy sends a message easily ignored that the country’s recovery is real, built on reforms over the past five years.
While the IMF notes government finances are under pressure in 2026 due to election spending, weak tax collections, and higher farm subsidy costs, the economy remains stronger than in 2021. 
The clearest evidence lies in the country’s key economic indicators. Zambia’s international reserves have climbed to US$6.4 billion, providing enough foreign currency to cover more than four months of import cover.
Inflation has fallen to 6.5 percent, comfortably within the Bank of Zambia’s target range, while debt restructuring negotiations have reached about 94 percent completion.
These achievements have restored confidence in Zambia’s economy after years of instability.
Such progress did not happen by accident. It reflects the economic direction adopted by President Hakainde Hichilema’s administration, which prioritised restoring fiscal order, rebuilding investor confidence, and repairing relations with international financial institutions.
When the New Dawn Government assumed office, Zambia was battling a debt crisis, high inflation, and a rapidly depreciating currency.
Rather than delaying difficult decisions, the administration embarked on reforms that included debt restructuring, tighter fiscal management, and policies aimed at stabilising the economy.
The IMF acknowledges these efforts, noting that Zambia achieved a primary budget surplus of 3.1 percent of Gross Domestic Product (GDP) in 2025 through sustained policy discipline.
That achievement marked a significant turnaround from the fiscal imbalances that had characterised previous years.
The appreciation of the Kwacha has also contributed to lower inflation by reducing the cost of imported goods and helping households and businesses benefit from greater price stability.
The IMF nevertheless warns that the gains should not be taken for granted. It projects that the primary surplus will narrow this year because of increased public spending, civil service wage adjustments, and revenue shortfalls.
It also points to weaknesses in VAT collection and urges the government to strengthen tax administration while broadening the country’s revenue base.
These recommendations are not a rejection of Zambia’s reform programme. Instead, they are a reminder that maintaining economic stability requires continuous discipline, particularly during an election year when spending pressures naturally increase.
The IMF also revised Zambia’s economic growth forecast for 2026 to 4.3 percent, citing lower mining production, reduced agricultural output following last year’s bumper harvest, energy constraints and uncertainty arising from conflict in the Middle East.
These are largely external challenges affecting many economies around the world rather than the result of domestic policy failures.
Significantly, the IMF remains optimistic about Zambia’s long-term prospects. It supports the government’s focus on expanding economic activity beyond mining by promoting agriculture, tourism, manufacturing, and value addition in the copper sector.
These are priorities that have consistently featured in President Hichilema’s economic agenda.
The IMF further stresses the importance of improving governance, maintaining transparency, and implementing policies that attract private investment.
These principles have become central to the country’s economic reform programme and have helped rebuild confidence among investors and development partners.
Equally important is the IMF’s commitment to continue supporting Zambia through a successor programme after the general elections. That commitment reflects confidence that the country’s reform agenda remains on the right path despite short-term fiscal pressures.
The latest IMF review, therefore, tells two stories. The first is that Zambia must continue strengthening revenue collection and exercising fiscal discipline.
The second—and arguably the more important one—is that the country’s economy has regained stability after years of uncertainty.
The challenge now is to safeguard these hard-won gains. If the reform momentum is maintained, Zambia will be better placed to convert macroeconomic stability into stronger investment, job creation, and higher living standards.
The IMF’s assessment is ultimately an acknowledgement that the foundations laid by President Hichilema’s administration are beginning to produce measurable economic results.
