Africa-Press – Zambia. When global ratings agency S&P Global announced an upgrade of Zambia’s credit rating from Selective Default (SD) to CCC+, the news made headlines across financial circles. But for many citizens, one question remained:
UNDERSTANDING THE RATING: FROM SELECTIVE DEFAULT (SD) TO CCC+
What is Selective Default (SD)?
Selective Default means a country failed to pay some of its debts, even if it continued paying others. For Zambia, this happened in 2020, when the government missed the US$42.5 million Eurobond interest payment.
Being in SD means:
• The country is considered unreliable in honouring its obligations.
• It loses access to affordable borrowing.
• Investors and lenders avoid the country.
• It signals a severe financial crisis.
In simple terms: SD means “Your finances collapsed, and you failed to pay your debts.”
What does a CCC+ rating mean?
CCC+ is still a low rating, but a major improvement from default.
It means:
• The country is no longer in default.
• Debt payments are being made or restructured.
• Investors view the economy as fragile but improving.
• There is a real possibility of recovery if reforms continue.
In simple terms: CCC+ means “You were in deep trouble, but now you’re stabilising and slowly rebuilding credibility.”
Why is the move from SD to CCC+ important?
This upgrade shows the world that:
Zambia is no longer in debt crisis mode
The country is honouring its obligations or has reached agreements with creditors.
Confidence is being restored
Investors, banks, and development partners see Zambia as more trustworthy.
Borrowing costs can start to fall
A better rating means cheaper financing for government and businesses.
It unlocks economic activity
More investment → more jobs → better stability → gradual relief for cost of living.
It reflects successful reforms
Transparency, fiscal discipline, and debt restructuring are working.
In everyday language
SD → CCC+ means: “You were written off as financially collapsed. Now the world recognises that you’ve stood back up, stabilised your books, and are moving in the right direction, but you still need discipline to stay on track.”
“HOW DOES THIS AFFECT ME, MY FAMILY, MY BUSINESS, OR MY COST OF LIVING?”
To answer this, we turn to the reflections of a man who has witnessed Zambia’s economic journey across multiple eras, Dr Situmbeko Musokotwane, Minister of Finance and National Planning, whose decades in public service stretch from the hopeful years of the 2000s, through the turbulence of the past decade, to today’s gradual recovery.
FROM STABILITY TO CRISIS: HOW ZAMBIA WAS KNOCKED OFF COURSE
Between 2015 and 2021, Zambia’s debt trajectory shifted dangerously.
Key governance and fiscal warning signs included:
• Loans contracted without full Ministry of Finance assessments
• Limited parliamentary oversight on major borrowings
• Poor tracking of state-owned enterprise (SOE) debt
• Expensive commercial loans replacing concessional financing
• Growing fiscal deficits without a stabilising IMF framework
The crisis peaked in 2020, when Zambia failed to honour a US$42.5 million Eurobond interest payment, plunging the nation into official default for the first time in its history.
The consequences were severe: rising prices, investor flight, collapsing confidence, and a shrinking economic space for ordinary people and businesses.
THE TURNING POINT: REFORMS AFTER 2021
The post-2021 period marked a deliberate shift toward restoration and rebuilding.
Reforms included:
1. Transparency in debt reporting
2. Fiscal discipline across ministries
3. Cleanup of incorrect and hidden debt figures
4. Adoption of an IMF-supported economic programme
5. Comprehensive debt restructuring negotiations
6. Passage of the Public Debt Management Act (2022) ensuring all loans require justification and parliamentary approval
These steps, though technical and sometimes painful, rebuilt Zambia’s financial credibility inch by inch.
The result is what the world is now acknowledging: Zambia is no longer in default territory, and its credit rating has been upgraded.
WHAT THE S&P UPGRADE MEANS FOR ORDINARY CITIZENS
Many citizens ask: “How does this rating change help me when the cost of living is still high?”
The answer lies in how ratings affect national borrowing and economic conditions.
1. CHEAPER FINANCING FOR PUBLIC SERVICES
A better rating reduces the cost of borrowing for government, freeing up resources for:
• roads and bridges
• clinics and hospitals
• schools
• energy expansion
• water and sanitation infrastructure
2. INVESTOR CONFIDENCE RETURNS
A country perceived as stable attracts more investments, which means:
• more mines expanding operations
• more tourism investments
• more agricultural and agro-processing opportunities
• new factories and service industries
3. A MORE PREDICTABLE COST OF LIVING
Economic predictability helps stabilise the Kwacha, inflation, and commodity prices, making life less volatile for households.
4. JOB CREATION ACROSS SECTORS
As investments rise, employment opportunities grow, especially in:
• manufacturing
• construction
• transport and logistics
• hospitality
• small and medium enterprises (SMEs)
In short, the upgrade doesn’t solve everything overnight, but it moves Zambia onto the path where solutions become possible.
WHY THIS MOMENT INSPIRES HOPE
Having served during both strong and turbulent economic periods, Dr Musokotwane emphasises that Zambia today is not relying on luck but on intentional, disciplined policy choices supported by:
• Rigorous debt management
• Parliamentary oversight
• Disciplined state-owned enterprises
• Transparent quarterly debt disclosures
• Predictable economic policies
• A national resolve to avoid repeating past fiscal mistakes
These are the building blocks underpinning S&P’s renewed confidence in Zambia.
BUT PROGRESS IS FRAGILE — DISCIPLINE MUST CONTINUE
Economic recovery is delicate. Only sustained discipline can protect Zambia from falling back into past pitfalls.
The country must continue avoiding:
• Unauthorized borrowing
• Opaque contracts
• Excessive government spending
• Undisclosed guarantees
• Poorly managed SOEs
• Weak procurement practices
The guardrails put in place since 2022 must be safeguarded to maintain stability and progress.
WHAT COMES NEXT FOR ZAMBIA
If Zambia maintains its current trajectory, the benefits will continue to extend to ordinary people. Expected outcomes include:
• Stabilising cost of living
• Productivity gains in energy and agriculture
• Expansion of private-sector investment
• Growth in SMEs and job-creating industries
• Better prospects for millions of young Zambians
Zambia has travelled through one of the most challenging valleys in its economic history. The S&P upgrade is a signal that the climb back toward stability and opportunity is not only underway, it is gaining recognition from the world.
A CALL TO PROTECT THE PROGRESS
As Dr Musokotwane reminds the nation, this is a moment for cautious optimism. Zambia is rising again, not by accident, but through discipline, transparency, and responsible governance.
Better days are possible. But they require every stakeholder, citizens, institutions, government, and the private sector, to guard the progress made and ensure the nation never returns to the mistakes of the past.
(C) UPND Media Team
For National Information and Public Engagement.
UPND Zambia
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