• S&P upgrades Zambia to CCC+ as debt talks advance and copper output rebounds.
• About 94% of $13.3 billion targeted for restructuring is now covered by agreements.
• Agency warns of election-related risks and high debt service despite improvement.

S&P Global Ratings raised Zambia’s foreign-currency sovereign rating to CCC+ from SD (Selective Default) on November 21, saying the country has made decisive progress in restructuring its external debt and is benefiting from a more favorable economic environment, driven in part by a rebound in copper production.

The agency also raised the short-term foreign-currency rating to C while maintaining a stable outlook. Local-currency ratings remain at CCC+/C. S&P said the upgrade reflects a “more forward-looking” view of Zambia’s creditworthiness as authorities near the end of talks with remaining commercial creditors.

Zambia has secured agreements covering about 94% of the $13.3 billion included in the restructuring process, involving both official and commercial creditors. Ongoing discussions concern less than 3% of external debt, mainly with commercial banks, while some bilateral deals still need to be formalized.

S&P said the risk of disruption is limited due to the G20 Common Framework’s comparability-of-treatment rules, most-favored-creditor clauses in restructured bonds, and the advanced stage of negotiations.

The upgrade comes as copper production surged 17.8% year on year in the first half of 2025. Copper accounts for around 70% of export earnings and 20–25% of public revenue. Authorities aim to reach 3 million tons a year by 2031, backed by heavy investment in the mining sector.

However, the agency warned that Zambia’s 2026 general elections pose a risk to policy continuity in a polarized political climate marked by tensions between the ruling UPND and the opposition United Kwacha Alliance.

Despite an expected recovery, Zambia remains exposed to climate shocks after the severe 2024 drought that hit agriculture and hydropower output. S&P expects public debt to ease gradually to 78.5% of GDP by 2028, but said debt service will remain high as external payments resume.

Zambian authorities welcomed the upgrade. Finance Minister Situmbeko Musokotwane said in a statement on Sunday that the decision “confirms that Zambia has moved out of default status and is steadily restoring its place as a credible, stable, and investable economy”.

He added that the government remains fully committed to fiscal discipline, completing the remaining steps in the debt restructuring, and expanding energy access as the economy recovers.

Fiacre E. Kakpo