ZAMBIA MUST ACT NOW OR RISK ECONOMIC RUIN – IMF DEPUTY CHIEF
The International Monetary Fund (IMF) has issued a stern warning to Zambia, urging the country to strengthen its economic defenses or risk being overwhelmed by future shocks. During an official policy address in Lusaka, IMF Deputy Managing Director Dr. Nigel Clarke declared, “Prepare or perish,” as he outlined Zambia’s urgent need to build stronger fiscal and monetary buffers.
Dr. Clarke, speaking at the Intercontinental Hotel, stressed that Zambia’s path to resilience lies in preparation and strategic planning. “Building economic resilience is among the most important things that Zambia is working towards,” he said, referencing repeated global disruptions including droughts, rising commodity prices, and tightening financial conditions.
Among the IMF’s key recommendations were four pillars: the accumulation of strategic reserves during stable periods, sustainable debt management, strengthening foreign exchange reserves, and diversifying energy sources to reduce vulnerability to natural disasters. Clarke emphasized that without these buffers, Zambia’s economy remains exposed to frequent external shocks.
He cited Zambia’s 2024 drought response as a successful case of buffer utilization, where targeted social support was rolled out without undermining macroeconomic stability. However, he warned that such interventions are only possible if the country builds adequate reserves and reduces dependency on external bailouts.
Zambia’s ballooning foreign debt, which reached $21.6 billion by the end of 2024, remains a significant threat to economic stability. Clarke called for fiscal responsibility and forward-looking reforms to create space for counter-cyclical policy actions in times of crisis. “Debt down, reserves up,” he advised a simple but urgent formula for stability.
The IMF also urged Zambia to accelerate diversification of its energy mix, particularly as climate volatility continues to impact hydropower generation. Clarke noted that physical and economic resilience are intertwined and must be addressed together through smart investment and policy discipline.
As Zambia pushes through debt restructuring talks and battles ongoing energy shortages, Clarke’s message resonates as a cautionary call: survival in today’s global economy demands not only hope, but hard-nosed preparation. Without buffers, Zambia risks reliving crisis after crisis. With them, it can weather any storm.
May 7, 2025
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