The International Monetary Fund announced on Friday that it has reached a staff-level agreement with Zambia on a new Extended Credit Facility (ECF) programme worth approximately $1.5 billion.

The previous IMF programme, valued at $1.7 billion, which helped the southern African nation emerge from a prolonged debt crisis, expired in January. Zambia became, in 2020, the first African country to default on its sovereign debt during the Covid-19 pandemic.

An IMF team led by Edward Gemayel, which visited Lusaka between 29 September and 9 October, said the proposed programme aims to preserve macroeconomic stability, strengthen economic resilience, and support the country’s growth ambitions.

Gemayel said at a press conference that approval by the IMF’s Executive Board is expected around December, with disbursements planned every six months over the three-year duration of the programme.

Funds will be released in seven tranches, with the first equivalent to approximately 15% of the total amount, according to Gemayel. The agreement will give Zambia access to 1,076 million Special Drawing Rights (SDRs), the IMF’s unit of account.

The deal comes as the country prepares its 2027 state budget. The Ministry of Finance indicated this week that public expenditure is expected to increase by 7%.

Zambia and the African Export-Import Bank (Afreximbank) are close to finalising a debt restructuring agreement, with only its formalisation remaining. The country is also holding ‘good-faith discussions’ with the Trade and Development Bank (TDB), Gemayel told Reuters.

The IMF projects the Zambian economy to grow by 5.6% in 2026, driven by performance in agriculture, mining, and exports. However, the institution warned of a weakening in the country’s fiscal position, due to revenues falling short of expectations and expenditure on the Food Reserve Agency exceeding projections.

Gemayel also told Reuters that the fund could accommodate a potential return by Zambia to the eurobond market, should the authorities decide to proceed. On Friday, bid prices for Zambian bonds maturing in 2033 rose to 95.82 cents on the dollar following the announcement of the agreement, according to Tradeweb data.