Zambia Pulls IMF Loan Extension Request, Turns to Domestic Financing

Zambia has withdrawn its request for a one-year extension of its International Monetary Fund support program, the IMF announced. No reason was provided for the reversal.

The decision forgoes approximately US$145 million in remaining funding under the 2022 Extended Credit Facility arrangement, which was designed to stabilize the nation’s finances following its 2020 debt default. With the program ending, Zambia must now rely on domestic revenue, market financing, and other partners to address future funding gaps.

The move comes amid double-digit inflation ahead of a general election in August. The government projects a significantly improved fiscal outlook by 2026, forecasting the budget deficit will be more than halved and economic growth will exceed 6 percent.

The IMF’s final review of the current arrangement is scheduled for board consideration later this month.