Zambia to see biggest drop in debt in Africa, Moody’s says

ZAMBIA is expected to record the biggest decline in government debt in sub-Saharan Africa in the coming months, boosting the outlook for its economic recovery, Moody’s Ratings said.

Zambia and Ethiopia will see the largest reductions in debt, according to the agency’s latest outlook on sub-Saharan Africa, while Botswana and Gabon will see the sharpest increases.

The projection comes days after Zambia reached a staff-level agreement with the International Monetary Fund on a new $1.472 billion extended credit facility to support its shift from stabilization to growth.

Moody’s raised its outlook for sub-Saharan Africa to positive on Tuesday, citing reforms that helped weather inflationary pressures, strong commodity prices and easier access to financing.

The agency expects total government debt in the region to fall to 56.6% of gross domestic product in 2027 from 62.4% in 2025, and annual gross borrowing needs to decline to 11.2% from 12.3%.

Zambia defaulted in 2020 during the COVID-19 pandemic and completed a protracted debt restructuring under its previous IMF program. The government has said the successor program will anchor fiscal discipline and the Grow Zambia agenda.

Moody’s listed Zambia among eight countries with positive outlooks, alongside South Africa, Namibia, Angola, Nigeria, Togo, Ghana and Republic of Congo. Thirteen countries are stable and four — Mauritius, Gabon, Mali and Senegal — are negative. Only Botswana and Mauritius are investment grade.

Despite the improved outlook, Moody’s cautioned that risks remain, including high interest costs. Zambia and Kenya will each spend about 35% of government revenue on interest payments in 2027, the highest in the region, it said.

Heavy debt repayment burdens, limited government revenue, climate risks and regional security threats remain weak spots, and a surge in inflation or investor pullback from bond markets could reverse gains, Moody’s said.

(Mwebantu, Monday, 12th October, 2026)