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Zambia’s government bonds are reportedly becoming more attractive to investors as shown in post-election reviews, with expectations of continued fiscal consolidation and political stability improving the country’s credit outlook, according to Access Bank Group.
Market strategists cited by the bank said the continuation of economic reforms could strengthen investor confidence and potentially pave the way for sovereign credit rating upgrades.
“Local bond yields could also decline as strong liquidity in the financial system and reduced political uncertainty support demand for government securities,” Access Bank said.
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The bank said Moody’s could potentially upgrade Zambia’s current Caa2 sovereign rating, while S&P Global Ratings could raise the country’s rating to B- as early as 2027 if fiscal consolidation continues.
The positive outlook is also expected to support the domestic bond market, with seven-year local bond yields projected to decline by between 75 and 125 basis points from the 15.8 percent recorded at the June auction.
Access Bank said Zambia’s 2033 dollar-denominated bonds were also offering attractive returns for investors seeking exposure to the country’s copper-driven growth prospects.
The bank said policy continuity following the election could enable Government to maintain fiscal reforms, strengthen macroeconomic stability and improve investor confidence.
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