Fitch Upgrades Zambia's Credit Rating: A Major Win for Citizens and Economic Recovery
International ratings agency recognises Zambia's debt restructuring success, setting stage for improved living standards
In a significant vote of confidence for Zambia's economic recovery, Fitch Ratings has upgraded the country's Long-Term Foreign-Currency Issuer Default Rating from 'Restricted Default' to 'B-' with a Stable Outlook, signalling major progress that will directly benefit ordinary Zambians.
The upgrade, announced on Friday, recognises Zambia's successful completion of its debt restructuring programme and positions the nation for improved economic prospects that should translate into better services, more jobs, and enhanced living standards for citizens.
What This Means for Ordinary Zambians
The ratings upgrade is expected to have several positive impacts on everyday life:
Lower Borrowing Costs: The improved credit rating will enable the government to borrow money at significantly lower interest rates. Fitch projects interest rates on external debt will fall to below 1.5% in 2025-2027, down from 7.5% in 2019. This means more government revenue can be directed toward essential services rather than debt payments.
More Money for Public Services: With debt service obligations declining from 5.1% of GDP in 2019 to just 2% by 2027, the government will have substantially more resources to invest in healthcare, education, infrastructure, and social programmes.
Economic Growth and Job Creation: Fitch forecasts robust economic growth, projecting GDP expansion of 6% by 2027. This growth, driven by continued mining sector expansion and agricultural recovery, should create employment opportunities across multiple sectors.
Falling Inflation: The ratings agency expects inflation to decline from 14% in 2025 to 8% by 2027, meaning Zambians' purchasing power will improve as the cost of living becomes more manageable.
Currency Stability: The upgrade reflects growing confidence in the kwacha, which has already appreciated in 2025. This should help stabilise prices for imported goods and protect savings.
Major Debt Relief Achieved
Zambia has successfully restructured approximately 94% of the USD13.3 billion included in its debt restructuring programme, including the USD3.8 billion Eurobond restructuring completed in June 2024.
Government debt is projected to fall dramatically from 114% of GDP in 2024 to 93% in 2025 and 85% in 2026, representing one of the fastest debt reductions in recent African history.
Strong Economic Fundamentals
The Fitch report highlights several positive indicators for Zambia's economic trajectory:
Real GDP growth is forecast to accelerate to 6% by 2027 from 5.2% in 2025, supported by continued mining expansion and agricultural recovery. Even during the 2024 drought, the economy demonstrated resilience with 4% growth.
The current account balance is expected to shift to surplus, reaching 1.5% of GDP by 2027, driven by copper production increases and sustained high copper prices.
International reserves will grow to 5.4 months of external payments by 2027, up from 3.6 months in 2024, providing crucial economic security.
Policy Continuity Expected
Looking ahead to the August 2026 elections, Fitch expects the ruling administration to be re-elected, ensuring policy continuity that will maintain Zambia's economic recovery trajectory.
The ratings agency praised the government's commitment to fiscal discipline, noting that Zambia maintains a strong record of avoiding fiscal slippages during election years.
Path to Further Improvement
Fitch indicated that Zambia could achieve further ratings upgrades if it continues its fiscal consolidation strategy and builds up international reserves beyond current projections.
The upgrade represents a major milestone in Zambia's economic recovery journey and validates the difficult but necessary reforms undertaken to restore macroeconomic stability. For ordinary citizens, it promises a future of greater economic opportunity, improved public services, and rising living standards.