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The International Monetary Fund’s (IMF) loan conditionalities imposed on Zambia create significant barriers to accessing quality healthcare. While aimed at fiscal stability, these conditionalities have introduced austerity measures that exacerbated inflation, deepened poverty and strained Zambia’s public health system. These are the main findings of the study ‘The cost of austerity: The toll of IMF conditionalities on access to health in Zambia’.
Developed by Wemos under the Make Way programme, the study provides policy recommendations to ensure that economic stability programmes do not compromise access to essential services like healthcare, which are critical for people living in poverty. The recommendations are directed at Zambian policymakers, civil society organizations (CSOs) and the IMF.
The IMF programme in Zambia
Zambia has been facing a severe economic crisis, compounded by high inflation and a rising debt burden. To address this, in 2020, the country sought support through the G20 Common Framework and the IMF’s Extended Credit Facility (ECF) programme, securing a USD 1.7 billion loan over five years. However, this loan came with the condition that the government would apply austerity measures. In response, the government raised consumption tax (value-added tax, or VATs) and increased the fuel and electricity tariffs. These measures ended up worsening social inequalities and hindering access to health in the country.
For example, recent figures from the Zambian Ministry of Health reveal a worrying deterioration in child health and nutrition outcomes. Between 2020 and 2023, children’s immunization decreased from 88.2% to 63.2%. In the same period, children with severe malnutrition rose from 0.7 to 3.1%.
Snapshot: more inequalities after the implementation of IMF austerity measures
Since the IMF programme was implemented, the purchasing power of Zambia’s population has dropped significantly. The austerity measures increased fuel and electricity prices, and triggered inflation across nearly all sectors of the economy. Severe droughts in the country further exacerbated food prices and insecurity, compounding the economic strain. Furthermore, electricity shortages due to the drought are driving up the use of fuel-powered generators at a time when fuel prices doubled in the last three years.
According to government official data, Zambia’s inflation rate rose from 10.3% in July 2023 to 15.4% in August 2024. Food inflation reached 17.4% in July 2024, while the combined costs of housing, water, electricity, gas, and other fuels increased by 11.7% in the same month.
Rising inflation has made everyday life more expensive for everyone, hitting low-income households the hardest. The impact is stark: between 2015 and 2023, the number of adults and children living in poverty and extreme poverty grew significantly (see comparison below).
|
2015 |
2023 |
% Change |
| Poverty levels |
54.5% |
60% |
+5.5 |
| Extreme poverty |
40% |
48% |
+8 |
| Child poverty |
66.5% |
70.6% |
+4 |
Source: UNICEF Zambia, 2023.
Although the IMF programme includes minimum spending commitments for essential services like healthcare, education and social protection (known as ‘social spending floors’), these are set too low, leaving vulnerable populations without the support they need.
