Haabazoka Reflects on IMF’s $1.55 Billion Support to Zambia: “It’s a Turning Point—If Managed Well”

Haabazoka Reflects on IMF’s $1.55 Billion Support to Zambia: “It’s a Turning Point—If Managed Well”

Former Economist and former Economic Association of Zambia (EAZ) president Dr. Lubinda Haabazoka has called on the Zambian government to ensure transparency, discipline, and strategic investment in the use of the $1.55 billion received from the International Monetary Fund (IMF), describing the funds as a “clear signal of international confidence” and a potential “turning point” for Zambia’s economic recovery.

Speaking in a recent reflection titled “What Has Zambia Done With the IMF’s $1.55 Billion?”, Dr. Haabazoka offered a detailed breakdown of how the funds under the three-year Extended Credit Facility (ECF) have been applied, and what more needs to be done to ensure ordinary citizens benefit.

“While many Zambians may not yet feel a direct impact in their everyday lives, the programme has laid critical foundations for long-term economic resilience and inclusive growth,” Dr. Haabazoka said.

According to the economist, the IMF funding has already been instrumental in four key areas: macroeconomic stabilisation, debt restructuring, social sector investment, and governance reform.

He noted that a portion of the funds has been used to stabilise the kwacha and build up foreign reserves, which has in turn contributed to controlling inflation and stabilising prices for essential commodities such as food and fuel.

“Part of the money has gone into strengthening Zambia’s foreign exchange reserves, which has helped stabilise the kwacha,” he explained.

The IMF support also enabled Zambia to clear some of its arrears and re-engage with creditors more effectively, a process Dr. Haabazoka described as vital in restoring Zambia’s credibility in international financial markets.

On the social front, he pointed to the recruitment of over 30,000 teachers and health workers, alongside the expansion of the Social Cash Transfer programme, as concrete ways the funding has improved lives on the ground.

“The hiring of teachers and health workers has improved access to education and healthcare, while the Social Cash Transfer is reaching more vulnerable households,” he said.

Haabazoka also highlighted improvements in institutional capacity and public financial management. He commended reforms in procurement systems and budget execution, as well as capacity building in key institutions like the Ministry of Finance, the Auditor General’s Office, and the Zambia Revenue Authority.

Looking ahead, Dr. Haabazoka proposed a number of interventions to deepen the benefits of IMF support. These include scaling up local production in agriculture and manufacturing, creating a youth employment fund, and expanding social protection to include food security schemes and transport subsidies.

He stressed the need for citizen inclusion in economic discourse, urging the government to be more transparent and accountable in its communication.

“Improved public engagement is essential. Citizens need to understand how government funds are spent and how ongoing reforms will benefit them,” he said.

Haabazoka further emphasized the importance of export-led growth, urging the Bank of Zambia to maintain prudent monetary policies while prioritising key sectors like agriculture, mining, and tourism to bolster foreign exchange earnings.

“If managed well, this phase of economic adjustment and reform can mark a turning point for Zambia,” he concluded. “What is now required is discipline, consistency and citizen empowerment.”

The $1.55 billion support under the ECF is part of Zambia’s broader effort to navigate its debt crisis and realign its economy on a path to sustainability. While challenges remain, Haabazoka’s reflection reinforces the notion that with the right approach, Zambia can leverage this support to foster a more inclusive and prosperous future.

©️ KUMWESU | July 29, 2025