Zambia will immediately receive about $184-million from the International Monetary Fund (IMF) after the lender’s board approved the fourth review of an extended credit facility.

The disbursement of funds under a 38-month IMF-supported program follows a staff-level agreement reached between the southern African nation and the fund last month. Including the latest payment, the nation has received about $1.3-billion under the plan.

“Program performance has remained broadly satisfactory,” the Washington-based lender said in a statement following a meeting of the executive board. “The authorities remain committed to maintaining macroeconomic stability and restoring fiscal and debt sustainability, while supporting vulnerable households and advancing structural and governance reforms to foster growth.”

Zambia, which is in the final stages of exiting a lengthy debt revamp after defaulting in 2020, is battling the effects of a severe El Niño-induced drought. This has propelled inflation to a three-year high as the country imports food and electricity to cushion the shortfalls.

The nation relies on hydropower for about 85% of its electricity generation, making it extremely vulnerable to reduced water supply. The IMF has trimmed its economic growth projections for Zambia this year to 1.2% and in November lowered its forecast for 2025 to 6.2% from 6.6% due to constrained electricity output.

“Zambia’s public debt is assessed as sustainable but remains at high risk of overall and external debt distress,” and it’s expected to reach a moderate risk of external debt distress over the medium term, the fund said.

Zambia will continue with fiscal consolidation, Finance Minister Situmbeko Musokotwane said.

“We stand ready to tighten monetary policy further to reduce inflation and accelerate governance and structural reforms,” he said in a statement.