Welcome to Africanews

Please select your experience

Watch Live

Business

business

Zambia withdraws request for IMF loan extension

Zambia's President Hakainde Hichilema, right, meets with Kristalina Georgieva, IMF Director in Lusaka, Zambia, Monday Jan. 23, 2023.   -  
Copyright © africanews
AP Photo

Zambia

Zambia has withdrawn its request for a one-year extension of its Extended Credit Facility (ECF) with the International Monetary Fund, the IMF said on Wednesday. No reason has been given for the turnaround.

The ECF was agreed in 2022 to help Zambia stabilise its finances after defaulting on its international debt two years earlier.

A one year extension would have released an addition $145 million and kept IMF monitoring in place.

Instead the southern African nation will have to rely on domestic revenues, markets and other partners to plug any remaining financial gaps.

Zambia is facing double-digit inflation ahead of August’s general election. The government is projecting an improved financial forecast for 2026, predicting that the budget deficit will fall by more than half and that growth will exceed 6 percent.

The Fund’s sixth and final review of Zambia’s ECF arrangement is scheduled to go to the board at the end of this month.