S&P affirms Zambia’s credit rating, provides vote of confidence in country’s debt management efforts

S&P Global Ratings has affirmed Zambia’s long- and short-term foreign-currency sovereign credit ratings at CCC+/C with a stable outlook, providing a vote of confidence in the country’s ongoing economic recovery and debt management efforts. The ratings agency said Zambia’s recent tender offer to repurchase its 2053 Eurobond should be viewed as a liability-management exercise rather than a distressed debt exchange or default. S&P noted that the government remains capable of meeting its debt obligations in full and on time, supported by an improving macroeconomic environment.

The stable outlook reflects a balance between positive developments, including improving fiscal performance, continued support from official creditors and progress in debt restructuring, against challenges such as high financing needs and outstanding external debt negotiations. “The ratings could come under pressure if the remaining debt restructuring process is delayed, legal disputes complicate creditor negotiations, or Zambia experiences weaker fiscal performance,” according to S&P. A sharp decline in global copper demand or tighter financing conditions could also negatively affect the country’s credit profile.

However, the agency indicated that Zambia’s ratings could improve if the government achieves stronger fiscal consolidation, reduces debt-servicing costs, narrows budget deficits and builds foreign exchange reserves at a faster pace. The announcement comes as global copper markets continue to offer encouraging signals for Zambia, whose economy remains heavily dependent on the metal. Copper prices remained close to recent highs amid improving investor sentiment following easing tensions between Iran and Israel.

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The decline in geopolitical uncertainty has reduced fears that rising oil prices could fuel inflation and trigger tighter monetary policies that may slow global economic growth. Market attention was also focused on China, the world’s largest consumer of copper. Expectations that demand linked to artificial intelligence technologies, data centres and power infrastructure would remain strong have helped support the long-term outlook for the metal.

Analysts say growing investments in electrification, renewable energy projects and digital infrastructure are creating new sources of demand for copper. 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.

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