IMF Revises Debt Framework for Low-Income Countries

The International Monetary Fund — IMF — has revised the framework it uses with the World Bank to assess whether low-income countries can sustainably manage their debt.

The changes are aimed at giving a clearer picture of countries facing debt stress and those whose debt is considered unsustainable, at a time when many low-income countries are dealing with higher debt levels and rising financing needs.

Under the revised framework, the IMF will pay greater attention to domestic debt, in addition to external debt, while also considering long-term development and climate-related financing needs.

The framework will also strengthen stress tests and improve the assessment of a country’s debt-carrying capacity, while placing greater emphasis on the quality and transparency of public debt data, including debt linked to state-owned enterprises.

For Zambia, the changes are relevant as the country continues to manage its debt following its restructuring process, with future assessments expected to consider a broader range of factors affecting the country’s ability to maintain debt sustainability.

The new framework is expected to become operational in the second half of 2027, while the IMF and World Bank prepare implementation guidelines and train country authorities.