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Finance and National Planning Minister, Situmbeko Musokotwane, has revealed that Zambia was seeking an additional US$145 million by extending its support programme with the International Monetary Fund (IMF) for another year.
The current three-year programme was scheduled to conclude in October 2025.
Speaking during a press briefing in Lusaka on Tuesday, Musokotwane said discussions for the extension would begin as soon as the current arrangement ends, citing renewed investor confidence.
“Investors are already regaining confidence—money is flowing back into government bonds and bills,” he said.
The Minister emphasized that continuing with the IMF programme was crucial, not just for direct financial support, but also to retain access to external donor funding that is contingent on the Fund’s involvement.
“If we were to end the IMF programme now, we would risk losing about K4 billion in the 2026 national budget. This is funding from institutions like the World Bank, African Development Bank, European Union, and other partners who base their support on the existence of an IMF-backed programme,” he explained.
Meanwhile, Musokotwane admitted that the government was facing growing pressure from domestic debt, which has surged to K242.7 billion, largely due to accumulated arrears—particularly those related to fuel procurement.
While Zambia’s external debt stands at US$15.8 billion, the Minister said domestic obligations pose the bigger challenge.
“The real issue is domestic debt. It is consuming more resources than we would like,” he said, adding, “Much of it stems from previous years. For example, we recently dealt with significant fuel arrears, which forced us to restructure the 2025 budget to accommodate the payments.”
Musokotwane traced the root of the problem to a shift in borrowing strategy beginning around 2015, and more markedly from 2017, when the country turned to domestic instruments such as treasury bills due to shrinking access to international credit markets.
“There was a significant increase in borrowing through treasury bills, and many of those are now maturing. Because that debt was not restructured, it is now putting pressure on the Treasury,” he said.
Despite the mounting fiscal concerns, Musokotwane sought to allay fears of a looming crisis.
“Relax. There is no debt crisis. Everything is under control,” he said.
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