International Ratings Agency Moody’s has given Zambia a stable but highly speculative outlook.
Zambia together with Nigeria and Kenya received their first sovereign ratings from the Moody’s agency on Wednesday.
All the three countries beat countries like Greece and Cyprus.
Moody’s gave Nigeria the highest rating of the trio, at Ba3, just under investment grade.
The ratings judge how likely a country is to default on its debt and go a long way toward determining a government’s cost of borrowing.
Kenya and Zambia were both assessed a B1, or highly speculative grade.
But that was still a higher rate than those given to some debt-stricken European nations such as Cyprus (B3) and Greece (C).
Nigeria’s rating was equal to that of Portugal.
“Moody’s believes the continent’s growth will be characterized by increasing utilisation of international capital market finance,” Jacques Els of Moody’s South Africa said.
The outlook on Zambia is stable. The B1 ratings reflect the following key factors: 1) Expectation of continued rapid growth, which should support economic diversification and over time increase the country’s low wealth levels. 2) The country’s track record of political stability, which benefits its developing institutional strength. 3) Zambia’s low albeit improved financial strength, following debt forgiveness from official creditors in 2006.