Author Summary
Fitch Ratings upgraded Zambia's Long-Term Foreign-Currency Issuer Default Rating to 'B-' from 'Restricted Default', with a Stable Outlook, highlighting normalized creditor relations and near-complete debt restructuring amid economic recovery efforts.
Rating Upgrade Details
Fitch Ratings elevated Zambia's Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) to 'B-' from 'Restricted Default' (RD). The Outlook remains Stable. This move reflects strengthened creditor ties and progress in debt workouts.
Key Drivers
- Commercial creditor relations have normalized, including the June 2024 restructuring of USD3.8 billion Eurobonds and agreements on USD272 million in non-bond external commercial debt.
- Debt restructuring covers USD13.3 billion; by November 2025, about 94% is resolved, leaving USD889 million (including supplier credits and plurilateral loans).
- Primary surplus expected at 1.8% of GDP in 2025 (down from 3.1% in 2024), rising to 2.2% in 2026, supported by high copper prices and arrears clearance.
Debt and Recovery Ratings
Senior unsecured long-term debt ratings upgraded to 'B-', equalized with the IDR, with a Recovery Rating of 'RR4'. Fitch's Country Ceiling Model suggests a +1 notch uplift. No qualitative adjustments applied.
ESG Factors
Zambia scores '5[+]' on Political Stability and Rights (positive impact as percentile above 50), but '5' on Rule of Law, Institutional Quality, and Corruption Control (negative due to below-50 percentile). Creditor Rights at '4' negatively affects profile post-2025 restructuring.
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