What Has Zambia Done With the IMF’s $1.55 Billion? A Reflection by Dr. Lubinda Haabazoka

The International Monetary Fund (IMF) has released a total of $1.55 billion to Zambia as part of a three-year Extended Credit Facility (ECF). This funding has generated significant debate, particularly around its use and the impact on ordinary citizens. As we try to answer the question, “What has Zambia done with the money?”, it is first important to understand what the IMF is, what it does, and what this support represents for our country.

The IMF, established in 1944 and headquartered in Washington, D.C., is a global financial institution comprising over 190 member countries, including Zambia. Its primary objective is to promote global financial stability, support international trade, foster sustainable economic growth and contribute to the reduction of poverty worldwide.

To achieve these goals, the IMF provides several services. First, it offers financial support to countries experiencing balance of payment problems, helping them afford imports and meet debt obligations. Zambia, for instance, is benefiting from such support through the ECF. Second, the IMF provides technical assistance in areas such as tax systems, public financial management and central banking. Third, it plays a surveillance role by assessing the health of member economies and offering policy advice, notably through Article IV consultations. Finally, it offers training and capacity building to government institutions and personnel.

Zambia’s ECF programme with the IMF is aimed at stabilising the economy, supporting reform implementation and enabling debt management. While many Zambians may not yet feel a direct impact in their everyday lives, the programme has laid critical foundations for long-term economic resilience and inclusive growth.

So far, the funding has been utilised in several key areas.

Firstly, it has supported macroeconomic stabilisation. Part of the money has gone into strengthening Zambia’s foreign exchange reserves, which has helped stabilise the kwacha. Additionally, it has supported inflation control measures, which in turn have improved price predictability, especially for essential commodities like food and fuel.

Secondly, the funding has been instrumental in the debt restructuring process. It has helped create fiscal space that enabled the government to clear some arrears and engage creditors successfully. The credibility restored by IMF-backed reforms has allowed Zambia to make progress in its debt negotiations.

Thirdly, a portion of the funds has been invested in the social sector. The hiring of over 30,000 teachers and health workers has improved access to education and healthcare across the country. The Social Cash Transfer programme has also been scaled up to reach more vulnerable households, ensuring a safety net for those most in need.

Fourthly, governance and institutional reforms are underway. Institutions such as the Ministry of Finance, the Auditor General’s Office and the Zambia Revenue Authority have seen capacity enhancements. Furthermore, reforms in procurement systems, state-owned enterprise oversight and budget execution are being implemented to improve transparency and efficiency in public spending.

Looking forward, there are several proposed interventions that can maximise the benefits of the IMF support.

Zambia must invest in scaling up local production, particularly in agriculture and light manufacturing. This will reduce the country’s dependence on imports, help stabilise the kwacha and create employment opportunities.

There is also an urgent need to establish a youth employment fund. The government should channel part of the fiscal space created by IMF support into programmes that promote entrepreneurship, with a special focus on green sectors and digital innovation.

Social protection efforts should be expanded beyond cash transfers. Introducing food security schemes and transport subsidies for the most vulnerable would further cushion citizens against economic shocks.

Improved public engagement is essential. Citizens need to understand how government funds are spent and how ongoing reforms will benefit them. Transparency and accountability must become a core feature of public communication.

Finally, the Bank of Zambia must continue to pursue prudent monetary policies and promote export-led growth. Key sectors such as agriculture, mining and tourism should be prioritised to support sustainable foreign exchange earnings.

In conclusion, the $1.55 billion provided by the IMF is not merely financial support. It is a clear signal of international confidence in Zambia’s reform journey. While challenges persist, Zambia has taken bold steps towards economic transformation. What is now required is discipline, consistency and citizen empowerment.

The opportunity is before us. If managed well, this phase of economic adjustment and reform can mark a turning point for Zambia. It can lead to a more resilient, inclusive and prosperous future for all.

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