S&P Upgrades Zambia Rating to ‘CCC+’ on Debt Restructuring and Copper Production Growth

LUSAKA – In a significant boost to Zambia's economic standing, S&P Global Ratings has announced an upgrade to the country's long-term foreign currency sovereign credit rating, moving it from 'SD' (Selective Default) to 'CCC+'. This re-evaluation reflects a growing optimism among international financial institutions regarding Zambia's commitment to fiscal discipline and its ongoing efforts to resolve its substantial debt burden. The upgrade comes on the heels of notable advancements in Zambia's debt restructuring talks, particularly with its official creditors. The framework for these negotiations, operating under the G20 Common Framework, has seen substantial progress, culminating in an agreement in principle that has been positively received by the market. This development is crucial for Zambia, as it paves the way for unlocking vital financial support and restoring investor confidence, which had been severely eroded by the country's default on its Eurobonds in 2020. Beyond debt resolution, S&P's positive outlook is also underpinned by the anticipated robust performance of Zambia's copper mining sector. Copper, a cornerstone of the Zambian economy, is projected to see significant production growth, driven by favourable global commodity prices and increased investment in the sector. This expansion is expected to provide a much-needed boost to government revenues, enhance foreign exchange reserves, and stimulate broader economic activity, thereby strengthening the country's capacity to service its restructured debt obligations. The 'CCC+' rating, while still indicating a high level of credit risk, signifies a marked improvement from the 'SD' status, which denotes a failure to meet specific financial obligations. The stable outlook assigned by S&P suggests that the rating is unlikely to change in the short term, provided Zambia continues its reform agenda and maintains momentum on its debt management strategy. This upgrade is a critical step towards attracting new