Zambia has secured its first credit rating upgrade from S&P Global Ratings since August 2019, signaling a tentative return to investor confidence after years of debt distress.
In a report issued on Friday, S&P raised the nation’s long-term foreign-currency rating to CCC+ from Selective Default (SD), reflecting progress in restructuring the country’s external debt and a strengthening economic backdrop, driven largely by a rebound in copper production.
The short-term rating was also lifted to C, while local-currency ratings remained unchanged at CCC+/C, with the outlook marked as stable.
“The higher rating better represents Zambia’s creditworthiness on a forward-looking basis,” the agency highlighted. “We understand the government is nearing completion of its offers to restructure loans to external creditors, primarily commercial banks.”
According to S&P, copper, the backbone of Zambia’s economy, surged 17.8% year-on-year in the first half of 2025, accounting for roughly 70% of exports and up to a quarter of public revenue.
This rebound, coupled with government efforts to restructure nearly all of the $13.3 billion in external debt, was central to the upgrade, the agency noted. Only a small fraction of the debt — less than 3% — remains under negotiation.
Situmbeko Musokotwane, the country’s Finance Minister, in a statement on Sunday, welcomed the move, saying it “confirms that Zambia has moved out of default status and is steadily restoring its place as a credible, stable, and investable economy.”
Musokotwane emphasised ongoing fiscal discipline and completing the remaining restructuring steps while supporting economic recovery.
While the upgrade marks a significant milestone, the agency warned that Zambia’s credit profile remains vulnerable.
Potential downside risks include delays in finalising debt agreements, litigation over lending status, a sharp fall in copper demand, or higher-than-expected borrowing costs.
Conversely, the agency flagged upside potential if the country continues to strengthen public finances, improves debt-to-GDP metrics, accelerates foreign reserve accumulation, and achieves faster economic growth.
S&P also noted Zambia’s exposure to climate-related shocks, citing the 2024 drought, and political uncertainty ahead of the 2026 general elections, which could affect policy continuity in a polarized landscape.
“The rating reflects a polarized political landscape, with tensions between the main political parties creating an uncertain and unpredictable policy environment,” it warned.
“While copper prices are favorable to the country’s exports and balance of payments dynamic, dependence on the commodity exposes the sovereign to significant volatility in terms of trade.”
Nonetheless, the stable outlook reflects confidence that ongoing reforms, a buoyant mining sector, and improved fiscal management will support Zambia’s gradual return to sustainable creditworthiness.
