Zambia’s sovereign credit rating has been upgraded by Moody’s Ratings, strengthening the country’s efforts to restore investor confidence and attract investment as the government prepares its 2027 national budget.

Moody’s raised Zambia’s rating from Caa2 to Caa1 and maintained a positive outlook on 30 October 2026, citing substantial and sustained improvement in the government’s debt trajectory, according to the Ministry of Finance and National Planning.

The upgrade marks further progress in Zambia’s recovery from the debt crisis that culminated in its 2020 sovereign default, following debt restructuring, fiscal consolidation and broader macroeconomic stabilisation efforts.

Secretary to the Treasury, Felix Nkulukusa remarked that the improved rating could support investor sentiment and, if sustained, help reduce borrowing costs for the government and businesses.

Nkulukusa said it may also improve access to international financing and strengthen prospects for foreign direct investment, although the extent of these benefits will depend on market conditions and continued reform implementation.

He said the announcement follows Zambia’s 9 October staff-level agreement with the International Monetary Fund (IMF) on a proposed 36-month, US$1.472 billion Extended Credit Facility arrangement.

The programme, which remains subject to approval by the IMF Executive Board, is intended to safeguard macroeconomic stability, strengthen debt sustainability and support inclusive, private-sector-led growth.

The rating upgrade comes days before Finance and National Planning Minister Situmbeko Musokotwane presents the 2027 national budget on Friday, 6 November.

The government says the budget will seek to consolidate economic stabilisation gains while laying the groundwork for increased production, investment, exports and employment under President Hakainde Hichilema’s Grow Zambia Agenda.

The Ministry said the positive outlook reflected prospects for further credit improvement, provided fiscal discipline and economic reforms are sustained.

However, the upgrade does not automatically translate into cheaper financing or stronger household incomes.

Delivering those outcomes will depend on effective public spending, productive investment, debt management and the economy’s capacity to generate jobs and foreign exchange.

For Zambia, the challenge is to convert improving sovereign creditworthiness into tangible economic gains, including higher productivity, export diversification and value addition.

As the government approaches the 2027 budget presentation, the Ministry has reaffirmed its commitment to prudent debt management and growth-oriented policies, emphasising that economic recovery must ultimately translate into better livelihoods for ordinary Zambians