Credit rating upgrade marks turning point for Zambia’s economy, says Bankers Association

The Bankers Association of Zambia (BAZ) says the government’s recent sovereign credit rating upgrade by S&P Global Ratings signals a major shift in the country’s financial and economic outlook.

Last week, S&P Global Ratings lifted Zambia’s long- and short-term foreign currency ratings from SD/SD (Selective Default) to CCC+/C—marking the country’s first move out of default status since 2020.

BAZ Chairperson, Lowani Chibesakunda, said the upgrade reflected government’s “consistent and disciplined efforts” in economic management and debt restructuring under President Hakainde Hichilema.

“Zambia’s upgrade from a selective default rating to CCC+/C is a testament to the government’s economic and debt restructuring reforms. This is no small achievement, considering the protracted journey toward resolving the country’s debt challenges,” Chibesakunda said at a press briefing in Lusaka on Monday.

Read more: Zambia exits debt default as S&P upgrades sovereign rating, cites successful restructuring of $13.3 billion

She added that the improved rating brings renewed confidence to the financial sector.

“This positive rating is a significant milestone and welcome news for the financial services industry. Since the 2020 default, sovereign risks have remained elevated, and this upgrade helps ease much of that uncertainty,” she said.

According to BAZ, the improved rating is expected to attract offshore investors, stimulate foreign direct investment, and lower liquidity and counterparty funding costs for banks.

“We expect increased inflows from offshore market participants. Foreign exchange inflows will strengthen as well, complementing revenues from mining and non-traditional exports,” Chibesakunda added.

The association also commended the government for increasing foreign reserves to US$5.2 billion, citing sustained fiscal discipline. It said these developments support projections that Zambia’s debt-to-GDP ratio could fall to 78.5 percent by 2028.

BAZ further urged the government to conclude negotiations with the remaining six percent of private external creditors under the G20 Common Framework to ensure comparability of treatment.

With improvements in the mining sector, ongoing energy reforms, growth in alternative energy projects, and favourable rainfall forecasts, the association said it remained confident in Zambia’s trajectory toward macroeconomic stability.

“We are optimistic that achieving single-digit inflation within the six to eight percent target range and maintaining a stable exchange rate is feasible in 2026 and beyond,” Chibesakunda said.

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