Zambia Plans New IMF Programme as Current Facility Nears Expiry; Bonds Pare Losses

Zambia will work with the International Monetary Fund on a new programme rather than seek an extension of its current loan arrangement, which is due to expire at the end of the month, the finance ministry said on Thursday. The shift followed market sensitivity after the IMF said Zambia had dropped plans to extend the programme, which initially weighed on the country’s bonds.

Officials had previously considered a one-year extension of the Extended Credit Facility (ECF), which would have unlocked about $145 million in additional financing and prolonged IMF monitoring, according to reports. The finance ministry said the move toward a successor programme should be seen as a reflection of completion and transition, and not as disengagement or weakened commitment to reforms.

Zambia’s current ECF was agreed in 2022 to help stabilise public finances after the country defaulted on its international debt in 2020. The IMF’s sixth and final review of the arrangement is scheduled to go to its executive board at the end of this month.

In markets, Zambia’s international bonds recovered part of earlier losses after the government signalled it would seek a full successor programme, following an initial sell-off linked to the extension reversal. At 11:06 GMT, Zambia’s dollar bond maturing in December 2053 was quoted at 72.13 cents on the dollar, down 0.4 cents, according to Tradeweb data cited in the report.

The policy pivot comes as Zambia heads toward elections in August amid persistently high inflation, with the government projecting an improved 2026 outlook in which the budget deficit falls by more than half and growth exceeds 6%. The IMF estimates Zambia’s economy grew 5.8% in 2025 and expects inflation to return to the central bank’s 6%–8% target range within two years.

‍