Zambia’s economy is forecast to grow by just 2.7% this year from 4.7% in 2022, as contractions in mining and energy weigh on growth, according to a budget plan published by the Ministry of Finance on Sunday.

After being the first African nation to default on its sovereign debt in 2020, Zambia has now concluded a debt restructuring plan with the International Monetary Fund (IMF). 

The plan is forecast to save Zambia $7.65 billion by 2026, according to a report released by the IMF. 

The budget plan sees Zambia’s economy growing by 4.8% in 2024, 4.3% in 2025 and 5.0% in 2026 as a result of improvements in macroeconomic conditions and the introduction of reforms, Reuters reports. 

According to Secretary to the Treasury Felix Nkulukusa, confidence was mounting in Zambia as the country worked on restoring fiscal sustainability. 

Zambia’s overseas debt hit $20.9 billion by the end of last year. Budget figures show debt service payments of 117.4 billion Kwacha ($6.24 billion), equating to 16.5% of GDP over the medium term, the Reuters report goes on to add. 

Zambia and the International Monetary Fund have now completed the initial review of the country’s $1.3 billion extended fund facility (EFF) programme.

The IMF’s executive board approved an immediate disbursement of $189 million to Zambia at the end of last week.

Furthermore, Zambia is seeking to sign a memorandum of understanding to restructure additional debt with private creditors as the IMF’s second review comes to a conclusion later in the year.#

In addition, the production of one of the country’s largest export commodities, copper, is forecast to decline to 682,431 tonnes this year from 763,550 tonnes in 2022, according to the budget plan.