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What Awaits Zambia's Economy in Next Three Years?

19:01, 16 July 2023

CC BY 2.0 / Mike Rosenberg / Street in Lusaka, Zambia

Rasina Musallimova

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In 2020, default on the sovereign debt was declared in Zambia, which was the first African state in COVID-19 era to fail to pay its debt. Recently, the country and the International Monetary Fun (IMF) have agreed on a restructurization plan of the debt, which will allow Zambia to save $7.65 billion by 2026, according to IMF.

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It is projected that Zambia's economy will increase by 4,7% on average from 2024 to 2026 as the the government’s medium-term budget plan published by the Finance and National Planning Ministry stated. Economic growth by 4,8% is expected in 2024, by 4,3% in 2025 and by 5% in 2026.

"Over the 2024-26 medium term, the government’s economic policies will focus on stimulating economic growth through restoration of macroeconomic stability, attaining debt and fiscal sustainability, facilitating a conducive environment for private sector participation and improving livelihoods," the document reported.

Zambia's economy is predicted to expand by 2,7% in 2023 in comparison with 4,7% growth in 2022, according to the Ministry.

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The country and the IMF have also concluded the first review of Zimbabwe's $1.3 billion extended fund facility (EFF) programme (a IMF's programme, which provides medium-term financial assistance to low-income countries), according to the IMF's website.

In addition, last week Zambia was allocated with $189 million by the IMF, organisation's website reported.

After the completion of the IMF's second review, the country plans to sign a memorandum of understanding to restructure additional debt with private creditors.