By 
Moody’s, the international credit ratings agency, has classified Zambia’s economic outlook as stable despite the country’s debt levels remaining alarmingly high, even after its successful restructuring of Eurobond and multilateral debts.
In its latest assessment released this week, Moody’s highlighted that while Zambia had secured significant financial relief through debt restructuring, the country’s debt continued to surpass its Gross Domestic Product (GDP).
“Despite the financial relief achieved through the Eurobond restructuring, Zambia’s government debt remains above 100 percent of GDP,” the agency noted.
The report emphasized that the country faced “exceptionally high government debt levels, weak institutions and difficulties covering large funding requirements.”
Read more: Zambia’s economic outlook attains stable status, according to Moody’s rating
The assessment warned that Zambia’s debt affordability was becoming increasingly strained, as access to new funding remains limited.
This, according to Moody’s, underscored the continued financial pressures facing the Zambian government.
“These challenges illustrate the ongoing financial pressures facing the government,” Moody’s said in its report.
Moody’s conducted a periodic review of Zambia’s ratings during a committee meeting held on October 7, 2024.
While no immediate changes were made to the country’s credit rating, Moody’s reaffirmed Zambia’s long-term local and foreign currency issuer ratings at Caa2, with a stable outlook.
The agency also pointed out that Zambia’s economic difficulties were compounded by heavy reliance on a single export commodity, as well as significant environmental and social risks. The ongoing generational drought, in particular, has added to these challenges.
However, Moody’s noted some positive developments in Zambia’s mining sector, which had shown signs of recovery.
The agency also highlighted continued support from official lenders as a mitigating factor against the country’s broader economic vulnerabilities.
“Credit weaknesses are counterbalanced by these positive developments,” Moody’s stated.
Despite these improvements, the report stressed that Zambia’s path to long-term economic stability remained fraught with obstacles, particularly in managing its high debt burden and securing sustainable financing to support its development needs.
WARNING! All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express permission from ZAMBIA MONITOR.
Comments