By 
Zambia’s recent credit rating upgrade to ccc+ from S&P Global Ratings signals progress in the country’s debt restructuring efforts, but the Society Organisation (CSO) Debt Alliance has warned that the country remained in a high-risk category with significant vulnerabilities.
The rating, while an improvement from a distressed arrears position, leaves Zambia exposed to financial shocks, elevated refinancing costs, and liquidity pressures, said CSO Debt Alliance Chairperson, Father Daniel Mwamba Mutale.
Speaking at a media briefing addressing the recent upgrade in Lusaka on Thursday, Mutale stressed that the upgrade should not be mistaken for stability.
“While this upgrade reflects progress, it does not eliminate risk.
Read more: Credit rating upgrade marks turning point for Zambia’s economy, says Bankers Association
“Zambia remains vulnerable to economic and political shocks, and the government must continue with strict fiscal discipline and debt management to avoid backsliding,” he said.
S&P highlighted that the country had resolved 94 percent of its US$13.3 billion commercial debt restructuring, yet lingering disputes with lenders such as Afreximbank and the Trade and Development Bank (TDB) could disrupt the process.
These lenders are said to be seeking preferred creditor status, which, if granted, could undermine ongoing negotiations and increase the risk of litigation.
Political uncertainty ahead of the 2026 elections adds another layer of risk, it is reported.
Mutale warned that policy reversals or reform rollbacks could threaten Zambia’s fiscal consolidation efforts, while high debt servicing costs—averaging 24.6 percent of government revenue over the next three years—limit spending on essential services like health and education.
“The ccc+ rating is a recognition of the work done so far, but it is also a clear warning. Zambia must not mistake a step forward for arrival.
The country is still highly exposed, and future shocks could have severe consequences if fiscal discipline and policy continuity are not maintained,” he said.
The upgrade offers hope but not immunity, signalling that Zambia’s economic journey remains precarious.
Mutale stressed that careful navigation over the next 12 to 24 months would determine whether the country consolidates gains or risks slipping back into financial distress.
This announcement represents a milestone in the country’s ongoing debt resolution and economic reform efforts.
It signals that Zambia had moved from a position of distressed arrears and uncertainty to one where a forward-looking assessment of our creditworthiness has improved, Mutale said.
WARNING! All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express permission from ZAMBIA MONITOR.
Comments