By Angela Moonga
Finance minister Dr Situmbeko Musokotwane says the sovereign credit rating upgrades carry far-reaching implications for the country’s economy, its international standing, and the welfare of our people.
Giving a ministerial statement on the several credit upgrades scored by Zambia in the recent past, Musokotwane said formally confirmed Zambia’s exit from a state of default with two major global rating agencies.
“This is a significant restoration of credibility. It signals to the world that Zambia is once again a country that meets its obligations and manages its finances responsibly. Secondly,the upgrades reinforce investor confidence. When rating agencies recognise Zambia as a more credit worthy destination, it reassures both domestic and international investors that our economic and governance fundamentals are strengthening,” Dr Musokotwane said. “Increased confidence translates into higher investment flows, expanded business activity, and ultimately more jobs for our citizens. Thirdly, these upgrades will gradually improve Zambia’s access to financing on international markets. While we do not intend to return to unsustainable commercial borrowing, a higher credit rating lowers the risk premium on the country, improves perceptions of Zambia’s debt sustainability, and over time allows Government and the private sector to secure financing at more affordable terms.”
He said the ratings served as an independent validation of government’s reform agenda.
“They confirm that the difficult but necessary fiscal and structural reforms we undertook, many of which have required sacrifice, are yielding tangible results. This credibility strengthens Zambia’s hand in discussions with development partners, investors, and credit institutions,” he said. “I wish to highlight the positive effects of debt restructuring. A successful debt restructuring agreement demonstrates dedication to our economic reforms and responsible fiscal management, thereby enhancing trust as a lower-risk investment choice. This heightened trust draws in foreign direct investment(FDI)and portfolio investment, resulting in influx of foreign currency. The financial room created by debt relief permits Governments to invest in infrastructure, public services and other developmental programmes. A more secure economic landscape following restructuring also motivates foreign investors to put their money into diverse sectors such as mining, agriculture,energy,manufacturing and tourism, leading to increased inflows of foreign currency. Increased foreign currency from these investments enables the central bank to build up FX reserves, thereby improving the country’s capacity to withstand external economic shocks and further supporting exchange rate stability.”
Musokotwane said the upgrades created a foundation for sustainable growth.
“They reinforce the importance of maintaining prudent fiscal management,completing negotiations with remaining creditors, protecting social sector spending, enhancing revenue mobilisation, and ensuring that we never again slide into debt distress. Madam Speaker, while the road ahead remains long, these developments demonstrate clearly that Zambia is moving in the right direction. The international community has taken notice. Investor confidence is returning. And the fundamentals for long-term prosperity are being rebuilt,” he said
He said that for her first time in more than five years, the country’s credit ratings had began to climb back to B-category.
“The recent upgrades by S&P and Fitch are not simply technical adjustments. They are a clear affirmation by the international community that Zambia has restored discipline, rebuilt confidence,and regained its place as a credible participant in global financial markets,” he said. “These positive assessments are a direct result of the collective efforts of the new dawn Government, this House and the Zambian people, who have shown patience, resilience, and commitment during a difficult period of economic reform. The investments we have made in sound fiscal management, debt sustainability, and structural reforms are now bearing fruit. But let me be clear. These upgrades are not a destination. They are a foundation. They give us momentum, and they signal that if we stay the course,if we continue to guard public resources diligently, implement reforms faithfully, and place the welfare of our citizens at the center of policy, then Zambia’s credit standing will continue to strengthen.
He mentioned the sovereign rating upgrade by S&P from Selective Default (SD) to CCC+ (“Triple C Plus”) with Stable Outlook as well as the sovereign rating upgrade by Fitch Ratings from Restricted Default (RD) to B- (“B Minus”) with Stable Outlook.
He said to fully appreciate the upgrades, Zambia obtained its debut sovereign credit ratings in 2011 from Fitch and Standard & Poor’s, both assigning B+ (“B Plus”) with a Stable Outlook, saying this reflected strong Gross Domestic Product (GDP) growth, low debt levels, and macroeconomic stability.
“In 2012, Zambia successfully issued its first Eurobond, supported by these strong ratings. Throughout 2013 to 2014, the ratings remained around B/B+, though with growing concerns over rising public expenditure and weakening fiscal discipline.2015–2018: Gradual Deterioration amid Rising Debt,” he said. “Between 2015 and 2018, all three major rating agencies, namely Fitch, S&P and Moody’s, began downgrading Zambia, citing rapid accumulation of external debt,.higher fiscal deficits, rising arrears to suppliers and contractors, and pressure on foreign exchange reserves. Consequently, the ratings progressively fell from “B+” to “B” to “B-” and finally “CCC”, signalling increasing credit risk.”
He said by 2019, Zambia’s ratings had fallen deeply into CCC territory, indicating very high credit risk.
In 2020, due to the COVID-19 shock and inability to meet Eurobond coupon payments, Zambia defaulted on its external commercial debt, becoming the first African country to do so during the pandemic.As a consequence, S&P downgraded Zambia to SD (Selective Default) while Fitch downgraded Zambia to RD (RestrictedDefault).Moody’s downgraded to Ca, these condlo west long-term credit rating on Moody’s scale.”
He said the Zambian government re-engaged the IMF between 2021 and 2023 by embarking on a home-grown reform programme, culminating in the approval of the IMF Extended Credit Facility (ECF) in August 2022.
“Though still in default categories, rating agencies began issuing Positive and Stable Outlooks, reflectingconfidenceinZambia’sreformtrajectoryanddebtnegotiations.2024,” he said
He said the country successfully concluded negotiations with Eurobond holders by restructuring US$3.8 billion in Eurobonds.
“This was after reaching Agreements with official creditors. To date, a total of$12.7 Billion out of the eligible $13.5 Billion translating to 94 percent has been restructured. These milestones have prompted rating agencies to signal imminent upgrades once the country exited default status,” he said Two weeks ago following comprehensive. debt restructuring, S&P upgraded Zambia from SD to CCC+with Stable Outlook. Shortly thereafter, last week Friday, Fitch upgraded Zambia from RD to B- with Stable outlook. For the first time since 2019, Zambia’s sovereign ratings are back in the B-category, signalling substantial improvement in the nation’s creditworthiness.Madam Speaker, this journey, from B+ in 2011, down to default in 2020, and now steadily climbing back up to B- in 2025, illustrates both the severity of the challenges we faced and the depth of commitment required to restore macroeconomic stability.”
He said on November 21, 2025, S&P Global Ratings upgraded Zambia’s sovereign credit rating from SD to CCC+ (long-term), C (short-term) and Outlook.
He said on November 28, 2025, Fitch Ratings upgraded Zambia’s Long-Term Foreign-Currency Issuer Default Rating, from RD (Restricted Default) to B- with Stable Outlook.
“This upgrade is particularly significant because it places Zambia one full rating category above S&P’s CCC+, it acknowledges the normalisation of relations with commercial creditors, it recognises improved debt sustainability, and it signals strong confidence in Zambia’s fiscal and structural reforms,” said Musokotwane.
