Zambia has officially exited external debt default, following S&P Global Ratings’ decision to upgrade the country’s long- and short-term foreign currency sovereign credit ratings to ‘CCC+/C’ from ‘SD/SD’, with a stable outlook.
The move marks a significant milestone in Zambia’s ongoing economic recovery and signals renewed international confidence in the government’s reform programme.
S&P Global Ratings—one of the world’s most influential credit assessment agencies—evaluates how well governments and corporations can meet their financial obligations. Its upgrade reflects growing confidence in Zambia’s fiscal management and its efforts to restore credibility after years of economic strain.
According to the Ministry of Finance and National Planning, the improved rating is an outcome of sustained fiscal discipline, strengthened policy credibility, and the government’s commitment to resolving the debt overhang that has weighed on the economy since 2020.
The assessment also acknowledges improvements in Zambia’s macroeconomic environment, supported by advances in external debt restructuring, resilience in the mining sector, and steadier inflation trends.
S&P reported that Zambia has reached restructuring agreements with official and commercial creditors representing about 94 percent of eligible external debt. Only a small remaining portion—primarily held by commercial banks—has yet to be concluded.
Finance and National Planning Minister Dr. Situmbeko Musokotwane welcomed the upgrade, describing it as a strong endorsement of Zambia’s reform trajectory and governance.
“It confirms that Zambia has moved out of default status and is steadily restoring its place as a credible, stable, and investable economy,” Dr. Musokotwane said.
He added that the development also recognises Zambia’s pioneering role under the G20 Common Framework, noting that the country was among the earliest to navigate the highly complex restructuring process.
“The upgrade is not only a recognition of economic progress, but a testament to the determination, discipline, and endurance of the government and the Zambian people,” he said.
Dr. Musokotwane further noted that the rating strengthens the government’s strategy centred on debt sustainability, export-led growth, sound macroeconomic management, improved governance, and expanded energy capacity. These reforms, he said, are aimed at creating more jobs, maintaining stable prices, providing greater opportunities for youth and women, and ensuring wider participation of local businesses in the economy.
The government extended its appreciation to official and commercial creditors, cooperating partners, civil society organisations, the private sector, and citizens for their support throughout the restructuring process. Their collective engagement, the ministry noted, has helped place the nation back on a sustainable economic path.
Looking ahead, the government reaffirmed its commitment to maintaining fiscal discipline, completing the remaining restructuring steps, expanding energy production, strengthening social protection, and accelerating private-sector-driven growth.
Zambia’s exit from default also highlights that potential risks from holdout creditors remain limited, owing to safeguards such as the comparability-of-treatment principle under the G20 Common Framework and the “most-favoured-creditor” clauses contained in Eurobond agreements.
With the S&P upgrade, Zambia is now better positioned to rebuild its global financial standing and pursue long-term, inclusive economic prosperity.
By Kuchalo reporter
Picture: Dr Situmbeko Musokotwane