Moody’s raises Zambia’s debt rating to Caa1
By the AFREEQUE newsroom, based on Mwebantu
Moody’s has raised Zambia’s sovereign rating from Caa2 to Caa1 and maintained a positive outlook, citing sustained improvement in the public debt trajectory. The agency announced the decision on 30 October 2026; the country still spends about 35% of its public revenue on interest payments, according to Moody’s.
Moody’s Ratings has upgraded Zambia’s sovereign rating from Caa2 to Caa1 and maintained a positive outlook, effective 30 October 2026. The agency attributed the upgrade to sustained progress in the public debt trajectory, following the country’s default in 2020.
The decision follows a preliminary agreement reached on 9 October between Zambia and the International Monetary Fund (IMF) on proposed financing of $1.472 billion over 36 months. The programme under the Extended Credit Facility remains subject to approval by the IMF Executive Board.
Zambia is now among eight sub-Saharan African countries to which Moody’s assigns a positive outlook, alongside South Africa, Nigeria and Angola. The agency expects Zambia and Ethiopia to record the region’s largest debt reductions.
Zambia’s Ministry of Finance and National Planning says the decision could boost investor confidence and, in time, help reduce borrowing costs. It also points to prospects for foreign direct investment and exchange-rate stability ahead of the presentation of the 2027 budget, scheduled for 6 November. Moody’s notes, however, that interest payments absorb about 35% of Zambia’s public revenue, one of the highest ratios in the region.
The decision follows an increase in Zambian inflation to 6.3% in October, reported on 30 October in the update on inflation in Zambia.
