Zambia Exits Default After 5 Years as Fitch Upgrades Rating

Zambia’s emergence from its five-year default classification represents one of the most significant sovereign debt restructurings in recent African financial history. The southern African nation had been carrying a default rating since 2020, when it froze debt servicing on its international obligations. Fitch Ratings’ decision to upgrade Zambia to B- with a stable outlook comes after similar moves by Moody’s Ratings and S&P Global Ratings, creating a consensus among the three major credit rating agencies that Zambia’s financial health has substantially improved.

The timing of Fitch’s announcement on Friday, November 28, 2025, completes a critical phase in Zambia’s journey back to financial normalcy. Market participants had been closely watching for Fitch’s decision following the earlier upgrades by Moody’s and S&P Global Ratings. The coordinated positive assessment from all three agencies sends a strong signal to international investors about Zambia’s improved creditworthiness and the effectiveness of its debt restructuring strategy.

Central to Zambia’s credit upgrade is the substantial progress made in restructuring $13.3 billion in liabilities. This massive debt overhaul required complex negotiations with multiple creditor groups, including bilateral lenders, commercial bondholders, and multilateral institutions. The successful restructuring demonstrates Zambia’s commitment to fiscal responsibility and its ability to navigate the challenging landscape of sovereign debt renegotiation.

The copper-dependent economy’s journey through this restructuring process began five years ago when mounting debt pressures forced the government to suspend payments. Since then, Zambia has worked systematically to address its financial obligations while maintaining essential public services and economic stability. The completion of this restructuring has been closely monitored by other developing nations facing similar debt challenges, potentially serving as a template for successful sovereign debt resolution.

The immediate market reaction to Fitch’s upgrade was positive, with yields on Zambia’s dollar bonds edging lower following the announcement. This yield compression reflects growing investor confidence in Zambia’s economic prospects and reduced perception of default risk. Lower bond yields translate directly into reduced borrowing costs for the government, potentially freeing up fiscal resources for development projects and social programs.

Looking forward, the stable outlook assigned by Fitch Ratings suggests that the agency expects Zambia to maintain its improved financial position in the medium term. This assessment provides a foundation for the country to gradually rebuild its access to international capital markets under more favorable terms. The upgrade could also attract foreign investment beyond government securities, as improved sovereign credit ratings often correlate with increased private sector confidence in a country’s economic management.

For the African continent more broadly, Zambia’s successful exit from default status represents an important case study in sovereign debt resolution. It demonstrates that with committed restructuring efforts and international cooperation, countries can work their way back from financial distress. However, the challenge remains for Zambia to maintain this hard-won progress through continued fiscal discipline and economic diversification beyond its copper dependence.