Moody’s: Zambia set for biggest debt drop in sub-Saharan Africa

Zambia is expected to record the biggest fall in government debt in sub-Saharan Africa in the coming months, according to Moody’s Ratings, a further boost to the country’s economic recovery.

In its latest outlook for the region, Moody’s named Zambia and Ethiopia as the countries set for the largest debt reductions, while Botswana and Gabon are expected to see the sharpest increases.

The projection comes just days after Zambia reached a staff-level agreement with the International Monetary Fund on a new USD 1.47 billion Extended Credit Facility, designed to support the country’s shift from stabilisation to growth.

Moody’s also listed Zambia among eight countries in the region with a positive outlook, alongside South Africa, Namibia, Angola, Nigeria, Togo, Ghana and the Republic of Congo.

The agency raised its overall outlook for sub-Saharan Africa to positive, citing reforms that have helped countries weather inflationary pressures, along with strong commodity prices and easier access to financing. It expects total government debt across the region to fall from 62.4% of GDP in 2025 to 56.6% in 2027.

The milestone marks a significant turnaround for Zambia, which defaulted in 2020 during the COVID-19 pandemic before completing a lengthy debt restructuring under its previous IMF programme.

Moody’s noted that challenges remain, including high interest costs. The Government has said the new IMF programme will anchor fiscal discipline and support the Grow Zambia Agenda, as it works to turn hard-won stability into lasting growth.