By The Zambian Economist Analyst

The Economics Association of Zambia has backed the staff-level agreement Zambia reached with the International Monetary Fund on 9 October, describing the proposed Extended Credit Facility as a welcome source of concessional finance at a time of mounting external risk. The statement was issued by EAZ National Secretary Dr John Musantu.

The agreement covers a proposed 36-month arrangement worth SDR 1.076 billion, about US$1.47 billion, which EAZ rounds to US$1.5 billion. It follows the US$1.7 billion programme that helped Zambia through its debt restructuring and has since ended.

Why EAZ calls this the right kind of debt

The association starts from the financing problem behind the Grow Zambia Agenda, the government plan to double the size of the economy. Domestic money alone will not pay for it, EAZ argues, so Zambia needs outside funding. That comes mainly through foreign direct investment or debt, and if it is debt, the association says concessional loans should come first.

An IMF Extended Credit Facility fits that description. EAZ notes that the facility comes at zero interest. Commercial borrowing, such as Eurobonds, costs far more and was at the centre of the default Zambia spent several years restructuring.

Stability first, then growth

EAZ lists what it means by a stable macroeconomic environment: controlled inflation, affordable interest rates, a stable exchange rate, sufficient reserves and strong domestic revenue collection. In its words, that stability is “a key enabler if not necessary condition” for the growth plan.

The timing matters. The association points to geopolitical conflicts pushing up global oil prices and to a weather outlook that could hurt Zambia’s power supply and harvests. A forecast El Niño season in 2026/2027 has already raised concern about water levels for hydropower and about crop output.

The private sector question

The most pointed part of the statement is about domestic credit. When government borrows heavily at home, banks can earn safe returns on Treasury bills and bonds, and they have less reason to lend to small businesses. Economists call this crowding out.

EAZ wants the IMF agreement to reduce that pressure. Once the facility materialises, the association says, it should cut government’s need to borrow from the domestic market to meet its spending obligations. Banks would then have more room, and more reason, to lend to SMEs and the wider private sector.

“The Grow Zambia Agenda is only sustainable and feasible if the country can create a thriving and profitable private sector,” the statement reads.

What it means for businesses and households

For a business owner, the link runs through interest rates and the Kwacha. If government borrows less at home, pressure on domestic interest rates should ease over time, and loans become easier to get. If IMF support strengthens reserves and confidence, the Kwacha is likely to be steadier, which helps importers and anyone pricing goods in dollars.

For households, a steadier currency and lower inflation protect what a salary can buy. None of this is automatic. It depends on the programme being approved, on the reforms attached to it and on how the Treasury manages its borrowing in the 2027 Budget.

What happens next

A staff-level agreement is not yet a loan. The deal still needs agreed policy reforms, any prior actions and approval by IMF Management and the Executive Board. Finance Minister Dr Situmbeko Musokotwane is leading Zambia’s delegation at the IMF and World Bank Annual Meetings in Bangkok, which run until 18 October.

EAZ closed its statement by asking government to keep disclosing information openly, so that the public can debate economic policy on the facts as Zambia pursues its plan to double the size of the economy.

Related: Zambia Goes to Bangkok With a US$1.47 Billion Question.

Related: Life After the IMF: What a New Programme Could Mean for Zambia.

Related: Grow Zambia Agenda: The Eight Numbers Behind the Plan to Double Zambia’s Economy.

Related: EAZ Seeks Formal Partnership With Finance Ministry as Musokotwane Calls for Practical Policy Ideas.

Related: EAZ Pays Courtesy Call on the Bank of Zambia as Both Institutions Pledge Closer Ties on Research and Policy.

Related: K806.1 Million Released for School Grants, Completing Zambia’s 2026 Funding.

Hub: Macroeconomy & Policy.

Related: Musokotwane Calls for Stronger African Voice in Global Debt Decisions as Borrowers’ Platform Begins Work.

Related: EAZ Opens Partnership Talks With Uganda Economists on Joint Outlook Reports and a Shadow MPC.

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By The Zambian Economist Analyst | Lusaka | 1 September 2026

Hichilema’s second term opens with a narrower excuse than his first. He inherited a defaulted economy in 2021. He hands himself one where debt has been largely restructured, inflation has fallen for consecutive months and government bonds are finding buyers again. What happens next in the economy, and in Zambia’s relationships abroad, depends less on Tuesday’s ceremony than on decisions still to be made: whether the IMF signs a new programme this year, whether copper output actually moves toward the government’s target, and whether the goodwill on display at National Heroes Stadium survives the treason case unfolding a few kilometres away at Mukobeko Maximum Security Prison.

A calmer inheritance than 2021

The macro numbers Hichilema starts his second term with are better than the ones he started his first with, by a wide margin. Inflation came in at 6.2% in August 2026, down from 6.5% in July and inside the Bank of Zambia’s target band of 6 to 8%. Public external debt is, in the IMF’s words, largely restructured following four years of talks with bondholders and bilateral creditors. The central bank has been easing rather than defending the currency, cutting its policy rate by 25 basis points to 13.25% at its most recent review.

Investors noticed. The first government bond auction after the election drew bids worth 37% more than the K6.3 billion on offer, and yields on seven-year paper fell by more than a percentage point. Zambia’s 2033 dollar bond traded at 97.72 cents on 18 August, holding up better than much of the wider African sovereign debt market that week.

Hichilema has staked his second term on turning that macro stability into something voters can feel in their pockets. “This term will focus on two things above all: bringing down the cost of living and creating more jobs,” he told Zambians ahead of the vote. “Every decision this Government takes over the next five years will be measured against those two tests.” It is a narrower promise than the reform agenda he ran on in 2021, and a harder one to duck: turnout fell to 57% in August, from 70% five years ago, a drop the Institute for Security Studies has linked to living-cost frustration among voters who feel the statistics more than they feel the relief.

The economic tests ahead

Will Zambia get a new IMF programme before the end of 2026?

The government says yes, and is treating it as the year’s central fiscal task. Zambia’s previous arrangement, a $1.7 billion Extended Credit Facility, expired in January after anchoring the restructuring of roughly $13 billion in external debt. Musokotwane has told investors Zambia is not yet ready to return to the Eurobond market on its own, and wants a new IMF arrangement in place first to signal continued discipline. Analysts expect Zambia to test the Eurobond market again once that relationship is renewed. “It would just build out a curve,” Philip Fielding of Fidelity International has said of a fresh issuance, allowing Zambian borrowers to price debt more competitively across a range of maturities. Until then, the 2033 bond is the closest thing markets have to a live verdict on the government’s credibility.

Copper: ambition against arithmetic

Copper still funds the state, and the government’s growth strategy leans on it more heavily each year. Output rose 8% in 2025 to 890,346 tonnes. Policy now targets 1 million tonnes in the near term and 3 million tonnes a year by 2031, a target that would require output to grow by roughly 22% annually from current levels, a pace Zambia has not sustained in decades.

Two policy levers sit underneath that target. A 10% export duty on unprocessed copper concentrate, designed to push mining houses toward refining cathode locally rather than shipping ore, is waived until 30 September 2026. And new local-content regulations require mining companies to source at least 20% of annual procurement from Zambian firms, a share that rises to 40% within five years. Both are aimed at capturing more value inside Zambia’s borders rather than exporting it in raw form, a long-standing complaint of the Zambia Chamber of Mines and successive governments. Whether output actually reaches the 2031 target depends on factors the government does not fully control: global copper prices, the pace of expansion at established mines on the Copperbelt, and Zambia’s own electricity supply, which the World Bank has previously flagged as a constraint on mining growth.

The fiscal arithmetic behind all of this has loosened slightly. The primary surplus the previous IMF programme targeted was 3.8% of GDP; the 2026 outturn is expected to fall about a percentage point short, a gap the IMF attributes to the public sector wage bill, farm input subsidies and election-year spending. None of that derails the restructuring, but it narrows the margin the new finance team will have to work with when IMF negotiators next visit Lusaka.

What the international community is watching

The inauguration itself told two stories at once. On the terraces of National Heroes Stadium sat five sitting presidents, Tanzania’s Samia Suluhu Hassan, Kenya’s William Ruto, Namibia’s Netumbo Nandi-Ndaitwah, Zimbabwe’s Emmerson Mnangagwa and Botswana’s Duma Boko, alongside China’s vice-presidential envoy Xian Hui and senior representatives from the United States, the United Arab Emirates, Rwanda, Malawi and Eswatini. Most of the governments in that room hold direct interests in the railways, border posts, power links and mining projects that will shape Zambia’s next five years, and their presence reads as a bet on policy continuity.

A few kilometres away, a different story was unfolding. Eighteen people aligned with Brian Mundubile’s National Reconciliation Party for Unity and Prosperity, including Mundubile and his running mate Makebi Zulu, face treason charges, and were moved to Mukobeko Maximum Security Prison on 31 August, a day before the inauguration. The government says the group was planning a coup with the help of foreign militia. Mundubile has called the charges fabricated. An Anglican bishop was also detained during the arrests; his family reported losing contact with him for two days.

That case has drawn a level of international attention Zambia’s politics rarely attracts. UN human rights chief Volker Turk said he was “deeply concerned” and urged the government to “stop arresting people arbitrarily and uphold fully the due process rights” of those detained, including prompt access to lawyers, family contact and appearance before a judge. The European Union’s election observation mission went further on the vote itself, concluding that the “broader electoral process took place in an environment that limited fundamental freedoms,” and pointing to “late legal changes, legal uncertainty, and unequal campaign conditions” that it said distorted the contest. The Commonwealth Secretariat separately raised concern over the post-election security operations.

The joint African Union-COMESA observer mission was more measured but not silent. It found voting “generally peaceful and orderly” in 98.6% of the polling stations its observers visited, yet flagged the Electoral Commission’s decision to suspend counting nationwide on 14 August, Mundubile’s premature declaration of victory before results were confirmed, and the arrest and charging of journalists during the campaign. It also noted that electoral legislation was enacted only three months before the poll, short of the six months international best practice recommends, and that the share of female candidates fell to 12.5% from 21% in 2021 under the new mixed-member electoral system. Only 66% of polling stations opened on time, against 89% in 2021.

None of this has visibly cooled Zambia’s relationships with its largest partners. UK Foreign Secretary Ed Miliband said the two countries “share a longstanding friendship rooted in Commonwealth ties” and pledged to deepen the partnership through Hichilema’s second term. World Economic Forum president Alois Zwinggi congratulated Hichilema and committed the Forum to continued cooperation on Zambia’s development priorities. The government, for its part, has pushed back on the tone of the criticism rather than its substance, arguing publicly that the EU’s election recommendations must fit Zambia’s own national priorities rather than be adopted wholesale.

What does the world expect from Hichilema’s second term?

In practice, two things that sit in some tension. Development partners and investors want continuity on the macroeconomic programme and on copper: debt discipline, a renewed IMF arrangement, and the power and rail investment that a tripled mining sector would need. Rights bodies and several Western and Commonwealth governments want the treason case handled through ordinary due process, and want the legal and administrative gaps the AU-COMESA mission documented closed before Zambia votes again. How Hichilema manages that second demand, without appearing to bow to external pressure on a domestic prosecution, will shape how much benefit of the doubt his government gets the next time results are close.

Business, investor and policy implications

For businesses: the immediate signal is that macro conditions are stabilising even where household costs are not. Firms exposed to government and parastatal payment cycles, which slowed during the counting delays in August, should see the disruption ease as the new administration settles in. The rising local-content thresholds in mining, 20% now, 40% within five years, are a genuine procurement opportunity for Zambian suppliers of transport, catering, safety equipment and light engineering services to the Copperbelt.

For investors: the bond market has already given its interim verdict, and it is a positive one. The swing factor for the rest of 2026 is timing: whether Zambia and the IMF reach staff-level agreement on a new programme before year-end, as the government hopes, or whether the fiscal slippage on the primary surplus pushes that timeline into 2027. A confirmed programme, followed by a return to Eurobond markets, would be the clearest marker yet that the 2020 default is fully behind Zambia.

For policymakers: the test is holding the cost-of-living and jobs promise alongside fiscal discipline, while managing six live parliamentary petitions and a rerun vote in Mandevu in a way that satisfies both domestic courts and the foreign observer missions now watching Zambia’s institutions more closely than at any point since 2021.

What happens next

• The cabinet. Law caps it at 30 ministers, drawn from among MPs. The names will tell markets and diplomats far more about the next five years than the ceremony did.
• Mandevu, 24 September. The first fresh vote since the counting suspension is a public test of the Electoral Commission’s procedures, watched closely after the AU-COMESA mission’s findings.
• Six High Court petitions. Each runs on a 90-day clock and will shape how settled the new Parliament’s numbers really are.
• The 2027-2031 Medium-Term Revenue Strategy. Consultations are already running, meaning the incoming finance team inherits a budget process already in motion rather than starting from a blank page.
• An IMF staff-level agreement. The government’s own target date is before the end of 2026.

The economic numbers point one way: toward continuity, a calmer inflation profile and a government trying to convert debt relief into an actual copper boom. The treason docket and the six court petitions point to how much of this mandate Hichilema is willing to spend proving Zambia’s institutions work for everyone, not only for the side that won. Both stories are still being written, and the next entries, the cabinet list and the IMF’s answer, are due within weeks.

Related reading

• Full Text: Hichilema’s Second Inaugural Address and What It Means for the Economy
• Hichilema Takes the Oath as His Second Term Begins at National Heroes Stadium
• Hichilema Sworn In for Second Term as African Leaders Gather in Lusaka
• Hichilema’s Second Inauguration: Zambia Now Waits for the Cabinet That Will Define His Final Term
• NRPUP Leaders Charged With Treason as Docket Rises to 18
• Six Parliamentary Seats Challenged Before the Lusaka High Court
• Zambia Says EU Election Recommendations Must Fit National Priorities
• Ten Days That Tested Zambia: Hichilema’s Re-election, Sealed Courts and a Cooling Inflation Rate
• Zambia to Launch 2027-2031 Revenue Strategy Consultations
• The Economics of Zambia’s 2026 Election (pillar page)
• Economic Diplomacy and Zambia in the Global Economy (pillar page)
• 2026 Zambia Election Results Dashboard

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Related: Musokotwane’s Reappointment Shows Policy Continuity, Next Phase Set for Productive Economics

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• Zambia’s Most Representative Parliament Now Has to Earn It

Related: Hichilema Hosts Duchess of Edinburgh at Community House, Points to Wider Zambia-UK Cooperation.

Related: Hichilema Arrives in Abu Dhabi as Zambia Presses the UAE for Investment and a Trade Deal.

Related: Hichilema Takes the Grow Zambia Pitch to Abu Dhabi as UAE Ties Shift From Diplomacy to Deals.

Related: Hichilema Congratulates Abiy Ahmed on Re-election as Ethiopia’s Prime Minister

By The Zambian Economist Analyst
Contributed analysis by Kelvin Chisanga

The planned launch of the African Credit Rating Agency (AfCRA), alongside the inauguration of an African Monetary Institute, could mark an important turning point in Africa’s financial architecture.

AfCRA has the potential to provide an African perspective on sovereign and corporate risk and challenge the high risk premiums often attached to African economies, premiums that feed directly into what governments pay when they borrow and what investors demand to hold Zambian and other African paper.

The prize: cheaper capital

If credible, this could help lower borrowing costs and create greater fiscal space for infrastructure, investment and social development. For countries that have spent recent years restructuring debt or defending their currencies, that fiscal space is the difference between building and merely servicing.

Credibility is everything

But credibility is everything. AfCRA must be independent, transparent and technically rigorous. It must not be perceived as an institution created simply to give African countries favourable ratings.

International investors must trust its assessments, including when they are critical. A rating agency that only flatters will be priced out of the market it hopes to influence.

What the African Monetary Institute could add

The African Monetary Institute could strengthen monetary-policy coordination, economic surveillance, research, data development and financial stability, while supporting Africa’s long-term ambition for greater monetary integration. Better continental data and coordination would also give rating work a firmer statistical base.

What it means for Zambia

For Zambia, these developments could provide an additional benchmark for assessing sovereign risk as the country rebuilds investor confidence after debt restructuring. The restructuring, two years on, already changed what bondholders hold and how they price the country. The reform programme now runs alongside an IMF-supported agenda for the next phase, and the country’s financing is gradually shifting from external debt toward domestic capital formation.

In that setting, a second opinion on Zambian risk from a continental agency would give policymakers and investors another reference point alongside the major international agencies.

Institutions alone are not enough

However, institutions alone cannot solve Africa’s economic challenges. African countries must continue strengthening fiscal discipline, debt sustainability, reserves, productivity, exports and governance.

The bigger opportunity

The opportunity is therefore much bigger than establishing two institutions. AfCRA can influence how Africa’s risk is priced, while the African Monetary Institute can strengthen continental monetary and financial coordination.

The ultimate test is whether both institutions can earn independence, credibility and global investor confidence. If they do, they could become important pillars of a stronger, more resilient and financially integrated African economy.

This is a contributed analysis by Kelvin Chisanga. The views expressed are the author’s own.

Related coverage

• Zambia’s Debt Restructuring, Two Years On: What Changed for Bondholders
• Zambia’s External Debt Dependence Is Shifting to Domestic Capital Formation
• Life After the IMF: What a New Programme Could Mean for Zambia
• Zambia’s Markets Before the Vote: What LuSE and the Eurobond Show
• Economic Diplomacy and Zambia in the Global Economy

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© 2026 The Zambian Economist.

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By The Zambian Economist Analyst

The International Monetary Fund has congratulated President Hakainde Hichilema on his re-election and said it wants to work closely with his administration on Zambia’s development priorities.

In a message to the President, IMF Managing Director Kristalina Georgieva assured him of the Fund’s “unequivocal commitment to supporting Zambia’s ambitious developmental agenda”.

Georgieva said the IMF looked forward to strengthening its engagement with the new administration and advancing the shared objective of building a prosperous Zambia.

Why the IMF message carries economic weight

The congratulatory message comes at a turning point in Zambia’s relationship with the Fund. In January, the IMF Executive Board completed the sixth and final review of the country’s 38-month Extended Credit Facility arrangement. The programme, approved in August 2022 and later expanded, delivered total financing of about US$1.7 billion.

The IMF said when the final review was completed that policy attention in 2026 should remain on fiscal discipline and policy credibility. It also called for continued work on debt sustainability, private-sector participation and economic diversification.

By May, Zambia and IMF staff had advanced discussions on a successor arrangement. Those negotiations were expected to resume with the incoming government after the August election, according to an IMF statement following a staff visit to Lusaka.

What Zambia and the IMF may discuss next

A congratulatory letter does not set the terms of a new programme. Formal negotiations will determine the policies, financing and review conditions attached to any successor arrangement.

When IMF staff visited Zambia in May, they said gross international reserves had reached US$6.4 billion, equal to 4.4 months of prospective imports, while inflation had fallen to 6.8% in April. The same mission warned of growing fiscal pressure in 2026 and projected a lower primary surplus if corrective measures were not taken.

The Government had expressed interest in a new Fund-supported programme built around sound macroeconomic policy and fiscal consolidation, while protecting social and other priority spending. The balance between those objectives will matter in the next round of talks.

What businesses and households should watch

For businesses, the immediate questions concern policy certainty, the exchange rate, access to foreign currency and the Government’s approach to spending and arrears. A successor arrangement could provide an external anchor for fiscal and monetary policy, but the details will determine how companies experience it.

For households, an IMF commitment does not by itself change food prices, electricity supply or wages. The practical effect will depend on the policies agreed with the Fund, the protection given to social spending and whether economic stability produces stronger employment and household incomes.

The next signal to watch is the formal resumption of Zambia-IMF negotiations and the Government’s statement of priorities for a successor programme.

Related coverage

• Hichilema’s Second Term: What It Means for Zambia’s Economy, Markets and Diplomacy
• Zambia’s Turnaround Won the Election. Now It Has to Deliver.
• President Hichilema Hosts Chinese Ambassador Han Jing for Courtesy Call in Lusaka
• More Economic Diplomacy coverage

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© 2026 The Zambian Economist.

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