Moody’s upgrades Zambia’s rating from negative to stable

Sun, 28 Jan 2018 10:23:11 +0000

By MUKOSELA KASALWE

ZAMBIA’s economic upgrade outlook from negative to stable is an important indicator of the international community’s discernment of the country’s political, social and economic stability.

It is also an endorsement of the country’s consistent and market friendly development policies, says Minister of Finance Felix Mutati.

Mr Mutati said the rating upgrade by Moody’s, a world’s leading source of credit rating services was a confirmation that Zambia’s image was admired and that  Government in 2018 would further slow down on the pace and appetite for debt accumulation.

He said Government this year would concentrate on the mobilisation of domestic revenue as that was the only way to strengthen  the economy.

Mr Mutati said Zambia’s Gross Domestic Product and economic fundamentals were solid as well as promising.

According to a rating action statement issued in London by Moody’s Investors Service, the stable outlook reflects the Zambian government’s reduction in liquidity pressures and a slowdown in debt accumulation.

Moody’s indicated that the affirmed B3 long-term issuer rating balances a strong growth potential boosted by ample natural resources.

Mr Mutati prodded the private sector to maximise on the positive outlook to develop credible alliances with players in the international community and grow empires which would generate jobs and create wealth.

In a statement issued yesterday, Ministry of Finance head of media and public relations Chileshe Kandeta said the minister applauded the results of the assessment conducted by Moody’s as a welcome assurance to investors and urged them to remain confident that Zambia was on track with economic stabilisation and growth.

Mr Mutati said the positive upgrade was based on the critical reforms which the government has embarked on under the Economic Stabilisation and Growth Programme to implement fiscal consolidation, remove subsidies, reform the energy sector, and embark on diversification of the economy through agriculture, tourism, and industrialisation.

“The results of the assessment conducted by Moody’s is a welcome assurance to investors, therefore, they should remain confident that Zambia is on track with economic stabilisation and growth.

“We will work diligently to ensure that the confidence of our people and that of our foreign partners in the good intentions of the government to stabilise and grow the economy are not taken for granted,” Mr Mutati said.

He said Government would remain focused, firm and committed in the implementation of its transformational agenda so that the gains in economic stabilisation were protected through enhanced fiscal consolidation and sustained inclusive growth, without leaving anyone behind.

Mr Mutati said reforms in procurement would continue and that the medium term economic fundamentals projection looked strong.

He said in 2017 there were a lot of lessons learnt from the migration from Farmer Input Support Programme (FISP) to the e-voucher system.

Mr Mutati said this year, Government would engage with agro dealers as well as bankers and finance lending institutions in good time to minimise on the inconvenience caused to the farmers.

He said the e-voucher would stay at 100 percent as it helped minimise on the wastage and loopholes in FISP.

Moody’s rating committee was called to discuss the rating of Zambia and revealed that the fiscal or financial strength, including its debt profile, has materially decreased and that economic fundamentals, including its economic strength have materially increased.