Zambia’s sovereign credit profile has received a significant boost with Fitch Ratings elevating the nation’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to B–. This upgrade, which mirrors an earlier move by S&P Global Ratings, signals strengthened international confidence in Lusaka’s economic recovery strategy and reform initiatives. The key drivers cited for the improvement were the near-finalisation of the country’s external debt restructuring and demonstrable enhancements in fiscal discipline.
Finance and National Planning Minister Dr. Situmbeko Musokotwane confirmed the successful renegotiation of 94 percent of the nation’s commercial, bilateral, and multilateral debt under the G20 Common Framework. This achievement is central to the country’s revitalised fiscal outlook. Projections indicate a substantial easing of the public debt burden, with the total public debt expected to drop from 114 percent of GDP in 2024 to 85 percent by 2026. This improvement is supported by expectations of sustained economic expansion, consistent primary budget surpluses, and a stronger Zambian Kwacha. Furthermore, external debt servicing costs are anticipated to fall significantly, decreasing to just 2 percent of GDP by 2027 from the 5.1 percent recorded in 2019.
The rating improvement aligns with increasingly optimistic economic forecasts. Zambia’s outlook includes strong growth in pivotal sectors such as mining and agriculture, a projected drop in inflation to single digits, and a return to a current account surplus beginning in 2026. Dr. Musokotwane underscored the importance of the consecutive rating upgrades, noting they position Zambia as a lower-risk, reform-oriented destination for foreign direct investment. He stated that this improved standing will facilitate better access to international financing, substantially reduce borrowing expenses, and unlock new opportunities across multiple economic sectors.
The government has reaffirmed its dedication to upholding stringent fiscal discipline and continuing the momentum of economic reforms. The ultimate objective remains translating this economic recovery into tangible benefits for the population, specifically through increased employment, further reduced inflation, and enhanced living standards.
