Global Ratings Upgrade of Zambia's Sovereign Credit Rating
| Date | November 21, 2025 |
|---|---|
| Type | Economic development |
Global Ratings Upgrades Zambia's Sovereign Credit Rating to "CCC+" refers to the decision by S&P Global Ratings on 21 November 2025 to raise Zambia’s long-term sovereign credit rating from Selective Default (SD) to CCC+. The announcement marked Zambia’s formal exit from default status after years of economic stress and a protracted debt restructuring process.
The upgrade was widely viewed as a milestone for the country’s fiscal rehabilitation efforts and a confidence-boosting development for both domestic and international stakeholders.
Background
Zambia entered selective default status in 2020 following an extended period of economic difficulty driven by high public debt, reduced export earnings, and external shocks. The government’s inability to meet scheduled Eurobond coupon payments triggered the downgrade, resulting in a constrained fiscal environment and a loss of access to affordable international financing.
Between 2020 and 2025, the country undertook negotiations with multiple creditor groups, including official lenders, private bondholders, and multilateral institutions. These talks aimed to restructure the public debt and stabilise the macroeconomic environment.
Details of the Upgrade
On 21 November 2025, S&P Global Ratings issued a formal notice upgrading Zambia’s sovereign credit position:
- The long-term foreign-currency rating was raised from SD to CCC+.
- The short-term foreign-currency rating was raised from SD to C.
According to S&P, the decision followed agreements covering roughly 94% of Zambia’s external debt stock, valued at US$13.3 billion. The successful negotiations were interpreted as evidence of strengthened fiscal discipline and renewed credibility in public-sector financial management.
S&P assigned a stable outlook, while underscoring continuing vulnerabilities such as political developments, climate-related economic shocks, and constraints in fiscal space.
Impact
The ratings improvement signalled renewed international confidence in Zambia’s sovereign creditworthiness. Analysts noted that the upgrade:
- Improves Zambia’s prospects for re-entering international capital markets.
- Supports government efforts to attract new foreign investment.
- Enhances the credibility of ongoing macroeconomic reforms.
The announcement also eased concerns over the country’s medium-term fiscal sustainability, particularly in relation to foreign-currency debt servicing and external liquidity.
Reactions
The Government of the Republic of Zambia welcomed the decision as a major achievement in the country’s post-default recovery path. The Ministry of Finance described the upgrade as validation of the debt restructuring programme and broader reform agenda.
Economic experts and regional financial commentators echoed this sentiment, describing the move as a step forward in stabilising market sentiment. However, they cautioned that risks persist, especially in the context of political uncertainty ahead of forthcoming elections and the long-term cost of debt servicing.
Challenges
Despite the positive outlook, Zambia continues to face structural pressures including:
- High external debt repayment obligations.
- Vulnerability to climate-induced shocks affecting agriculture and energy.
- Persistent fiscal discipline requirements.
- Political risk associated with the electoral cycle.
Experts emphasise that sustained policy consistency and prudent financial management will be crucial to maintaining the improved rating.
