Tuesday, May 28, 2024

Ignore Moodys Credit Downgrade on Zambia, Government tells Investors and the Public



THE Ministry of Finance has said that a rating of Zambia by Moody’s Investors Service, an international credit rating agency, should be ignored because the grading is unsolicited and against best practice.

The Ministry said that Standard & Poors, another rating agency, on Friday reaffirmed Zambia’s rating at B/B long and short term foreign and local currency credit ratings with a stable outlook, reflecting their expectation that Zambia’s fiscal deficit will not weaken significantly.

Ministry of Finance public relations officer Chileshe Kandeta said in a statement in Lusaka yesterday that Government has rating relationships with only two agencies, Fitch and Standard & Poors.

“The two are the only ones with whom we engage on policy matters, and data provision and reconciliation. Therefore, the assessment made by Moody’s that Zambia’s credit rating had deteriorated should be ignored because its correctness was not discussed with any authorised representative of the Zambian government,” Mr Kandeta said.

He said Fitch and Standard & Poors, are sufficiently competent to provide the required independent credit rating services.

Last week Moody’s Investors Service downgraded its credit rating for Zambia citing lower growth and an extended period of weak commodity prices.

Zambia’s rating was cut one level to B2, five steps below investment grade. The outlook on the rating was changed to stable from negative.

Zambia is grappling with its worst- ever power shortage and metal prices that have fallen to six- year lows, prompting companies including Glencore Plc to halt operations. The kwacha has fallen 41 percent against the dollar this year, the worst performance among the world’s currencies.

“The key driver for the downgrade is our expectation that the trend of persistent fiscal deficits and deterioration in debt metrics witnessed over the past few years is likely to continue,” Moody’s analyst Matt Robinson wrote in an e-mailed report. “An extended period of weak commodity prices, constrained copper production, and domestic electricity shortages” are hurting business activity, he wrote.

Yields on Zambia’s $1.25 billion Eurobonds maturing in 2027 have climbed to 11.4 percent from 9.4 percent when they were sold in July.

Moody’s held its rating of Zambia’s foreign debt at B1 in May while changing the outlook to negative from stable. Glencore’s decision to suspend output in the country threatened growth the government forecast would reach 5 percent this year, the company said in a report this month.

Standard & Poor’s on Friday affirmed its B rating on Zambia, also five steps below investment grade, with a stable outlook.


    • The ruling Party and government are on record saying the Zambian economy has problems but atrribute this to past government and nature. When the economy malaise is given a grade as would be understood by outsiders, the government disputes the grade because they would rather it was announced by someone else. The ostrich burying its head in the sand couldn’t be more apt here. It goes withiout saying that if the agency had nice words for the Zambian economy, the government would have gone to town loudly about it. They would rather be the naked emperor.

    • Nobody is going to ignore anything! What fuuoooll would rather listen to you than listen to such a highly competent and respected ratings agency?

    • To be fair, the PF government must also reject this past positive rating from Moody’s from 2014:

      Announcement: Moody’s: Zambia’s credit rating balances growth prospects and a healthy government balance sheet against narrow economic base and institutional constraints: source: Moody’s



      Global Credit Research – 09 Dec 2014

      London, 09 December 2014 — Strong economic growth and robust government fiscal strength continue to support Zambia’s (B1 stable) credit profile, says Moody’s Investors Service in its annual Credit Analysis report, published today. However, the rating agency notes that the small size and relatively undiversified nature of Zambia’s economy mean that it is vulnerable to adverse conditions in the agriculture sector and…

    • contd..
      ..onditions in the agriculture sector and volatility in global copper prices.

      The rating agency’s report is an update to the markets and does not constitute a rating action.

      “Zambia’s economy continues to register robust growth rates, averaging 7.8% per annum in real terms since 2005. We expect that economic growth will remain at around the same level in the coming years, supported by the development of infrastructure projects. The government’s fiscal position is also strong, though deficits have increased and high dependence on a single export commodity, copper, leaves Zambia exposed to adverse price movements,” says Matt Robinson, senior credit officer at Moody’s.

      With nominal GDP estimated at $26.3 billion in 2014, Zambia’s economy is on par with the…

    • Kekekekeke @Ndobo,
      Zambian kwacha has performed the worst in the world, 41% down just in this year. And you still have same Minister of Finance. When is Edgar going to get settled and accept that he is the president? He is still in a shock, that its too good to be true that he took over from Sata.

    • contd…
      …”With nominal GDP estimated at $26.3 billion in 2014, Zambia’s economy is on par with the Sub-Saharan Africa median, but ranks below the median for B1-rated sovereigns globally, according to Moody’s. Zambia’s GDP was rebased to 2010 prices in February 2014, and preliminary estimates suggest that the economy is now 25% larger than previously thought”.

      Now, Let the Ministry of Finance also reject these positive ratings that Moody’s did in 2014. What hypocrites these Government officials are. I remember when Moody’s gave a positive rating last year, the Government officials were celebrating “on top of their roofs” that the Government was working hard..

    • full old article: “https://www.lusakatimes.com/2014/12/10/zambias-economic-growth-robust-pf-governments-fiscal-position-also-strong-moodys/”

      Please Government, reject this one as well!

    • The problem with being overly defensive is that you deny even what is obvious. All Moody’s have down is to adjust Zambia’s rating inline with that of S&P and Fitch. Moody’s B1 rating was equivalent to S&P/Fitch B+ meaning that they valued the debt profile better. With the current economic slump all they have done is to agree with S&P/Fitch by reducing the grade to B2 (equivalent of S&P/Fitch B rating). So choipa apa chilipati?

  1. @Completely agree with you Ndobo. This government thinks people are stupid. Unlike these proven failure (PF), Moody’s does not provide advise or information based on elections. They say things as what they are based on their analysis and they are very right. In line with all professionals (economists, accountants etc are saying). The main cause of this downgrade is poor governance. That is the problem of ushering in an incompetent person as president who sleep on duty.

    • @Mr Intelligent, I love your copy and paste patch-up work! And you expect people to read all that plagiarism without artributing the source! You should be working for the Zambian Government!

  2. Ba Zambia finshi mulefwaya natwishiba fwe bene eeeeh Lungu eeeh Lungu eeeh Lungu eo tulefwaya x2 via singing kansi ni malabishi yeka yeka useless President
    @ Emmanuel Mwamba aka Katondo boys where are you? ?????

  3. What else should we ignore? The devalued kwacha? Some technocrats should learn to shut up!! If this was being said by PF sycophants such as Sunday Chanda or Chilufya Tayali, I would not have bothered commenting.

  4. PR made sense when there was limited exposure of information and the Internet was either absent or low. Today one looks foolish to try to window dress the truth. Yes, it was unsolicited but what would have changed if it was solicited? Obviously some crucial indicators would have been hidden out of sight and the truth would have been compromised.


    • You are talking about a president who chartered a plane and paid US$300,000 to go to NewYork with that huge delegation and this is before allowances and accommodation instead of using emirates the way Sata did when ku UN. So good luck in hoping Lungu would even think of giving up his salary. He is in the presidency to have a good time.

    • @ Dudelove

      Do you mean our HUMBLE, VISIONARY and WISE President did that?
      Sorry mate, I will only believe that if is reported in Daily Mail or ZNBC (lol)

  6. “…THE Ministry of Finance has said that a rating of Zambia by Moody’s Investors Service, an international credit rating agency, should be ignored because the grading is unsolicited and against best practice…”

    What a bunch of of Chanda style “educated” (lol) “economist” pillocks.

  7. This is stuppid poildition to take and ask Zambians ati mwefipuba shibateni tulombe. Chileshe Kandeta please shut the fu****k up!

  8. The tendency to ignore informed opinion and enclose ourselves in our seemingly safe cacoons is what has landed us where we are. Apolitical critics give sound advice which is ignored at one’s peril.

  9. Comment:ba swine ba pf, they are just preoccupied with defending their poor perfomance even when its obvious they have failed. zambians are fools to have voted these people.

  10. This says that Kandeta is his own boss at MoF, just like Amos Chanda at State House. They have no supervisors and are now principals in their own right. Kandeta is just another ignorant PFoolish cadre who has no understanding of international finance. Financial intelligence gathering does not require PF’s permission or explanation of their failure in running Zambia’s finances. This credit rating cannot be ignored when govt is failing to pay civil servants on time and the Kwacha is on freefall. The rating is consistent with all economic indicators in Zambia.

  11. Ignore Moodys at your own peril.
    Moodys and S&P are respected international ratings agencies; every investor,including the IMF & World Bank,follows their data.
    Alexander Chikwanda and the incompetent PF regime should stop misleading Zambians.

  12. But we are being ruled for real!!!! Next time (please) ECZ you should allow us to use a tick to vote not putting the X for the one you have voted for and may be we will end up with the right leaders!!!

  13. Kind of curious.If the same Moody’s had upgraded the credit rating these mangwams who have been singing their praises to nonsense. Yaba!!

    • @ webman

      You are right. I am believing BoZ statement:

      Date Time Buying Rate Selling Rate
      28 September 2015 09:30 10.9072 10.9272
      25 September 2015 15:30 10.7733 10.7933
      25 September 2015 12:30 10.7478 10.7678
      25 September 2015 09:30 10.5783 10.5983
      24 September 2015 15:30 10.5667 10.5867
      24 September 2015 12:30 10.5225 10.5425
      24 September 2015 09:30 10.5189 10.5389
      23 September 2015 15:30 10.5217 10.5417
      23 September 2015 12:30 10.4281 10.4481
      23 September 2015 09:30 10.2228 10.2428

  14. Ignore Moody’s?

    Oh, OK… They must be bitter like everyone else who doesn’t agree. Sure! Probably they’re haters too… right?

    • @ Spuds

      Off course we should ignore Moody’s. After all, they are under fife heaters or corrupt political demagogues which take instruction from “The Past” and cartel which is enjoying HUMBLE privileges of power!!!

  15. The problem with Pf is that everything is politics. This country is finished under the pf, period! The sooner the Zambians realize the better.

  16. When we say we are being led by an incompetent lot, we are called bitter. This right here is the answer to what we have been talking about. Edgar and team are leading us to the knife edge and we are ndwii! The same govt did not dispute the upgrade but that was due to works by Magnate and Dr.Situmbeko when these learned men headed the Ministry of Finance

  17. They empty tins are happy to take upgrades from this selfsame credit agency to borrow money BUT disagree with downgrade in the face of overwhelming evidence. When are these empty tins going to take responsibility for anything?

    • Kandeta is practicing UNIPist principles. KK perfected that and the PF has simply swept it off the dust-swept book shelf. This is as disgraceful as it is embarrassing! The UNIP government rewarded sycophancy and sent professionals either into silent exile or for those who could, self-imposed economic exile.

  18. When its thumbs up to the Zambian economy by Moody’s we rejoice with them and when its thumbs down we shout ‘ignore them’ What a country!

  19. On CNN “AFRICA MARKET PROGRAMMES”. Zambia as number 4 among the top 10 African. Countries with great prospectors, beating Africa’s largest economy Nigeria into number 5 and topped by Ivory Coast which’s number 1.

    Also l think our journalists who are suppose to be news hurting are more interested in soapies, which doest add value. In all fairness it’s not the function of BOZ to protect our country from this scoundrels with ill intentions for the country.
    lt must be appreciated that such progress is a process and not an event.

  20. With all that has been happening to the Kwacha and the resultant consequences on the economy in general, just who the hell does this kaChileshe think he is kidding? If the above is not clear signs that Zambia’s credit rating has deteriorated, then only good lord knows what these chaps are taking us to. As we all know, these Kolwez do not know anything about a functioning economy because the nearest comparable they have to an economy is Katanga-Zaire, where there is none at all!

  21. This Govt ignores information when it is not in their favour. If the rating was positive on their side they would be the first ones to blow the horns.

    Moody had done the ratings of 2011, 12 and 13. the rating was in favour of the Govt, and yet they never refuted the information. Today when the rating report goes against them they want to shove it aside and claim it is fake and not to be followed.

  22. No doubt your cry wolf would make sense if you had rejected their past upgrade as unsolicited. No doubt that the economy is bad shape. The best you can do is don’t comment, let investors do their home work and believe whatever agency they want, remember in 2008 all rating agencies got it wrong on US housing ..and those Investors who believe them got their fingers burnt. It is not the Job of Government to tell the public which Agency to trust and which one not to trust, smells of immaturity of the people at the Finance Ministry

    • The point here is that an investor seated in London, New York or Frankfurt will listen to Moddy’s not some chat called Chileshe Kandeta from Ministry of Finance in Lusaka Zambia a city which they are not even sure is in South America, Africa or Asia

  23. The point here is that an investor seated in London, New York or Frankfurt will listen to Moody’s not some chap called Chileshe Kandeta from Ministry of Finance in Lusaka Zambia a city which they are not even sure is in South America, Africa or Asia

  24. Next to increase will be fuel prices and following on closely will be bus fares and everything else. If we can not run our own economy, can we then try to have expatriate cabinet and president to put things right for us? We can not fix this economy by voting in responsible leaders as voting in Zambia is largely on tribal and chimbuya basis. Otherwise this is the sure way of being killed silently by the people you have voted into power through escalating cost of living. Salaries will certainly never match these increases.

  25. You can’t just ignore your credit score, neither will the lenders. That’s the dumbest advice yet to come from this administration.

  26. Guys,
    I trust our economists in Zambia, for the following reasons:
    1) They are more knowledgeable than rating agencies, IMF or world bank
    2) They know the economic pulse of the country better than anyone, and
    3) They monitor the cash flow and longer term export earnings
    Such downgrades is a new form of colonialism, contrived to get western countries to buy our assets at a knocked-down price
    ….JUST IGNORE THEM…AND SUPPORT PRESIDENT LUNGU….And the PF policy makers, who have the country’s interest at heart!

    • @ Rahul Mishra

      So much about your trust.
      Bank of Zambia: Market Exchange Rates (Kwacha/US Dollar):
      Date Time Buying Rate Selling Rate
      28 September 2015 12:30 11.4156 11.4356
      28 September 2015 09:30 10.9072 10.9272
      25 September 2015 15:30 10.7733 10.7933
      25 September 2015 12:30 10.7478 10.7678
      25 September 2015 09:30 10.5783 10.5983
      24 September 2015 15:30 10.5667 10.5867
      24 September 2015 12:30 10.5225 10.5425
      24 September 2015 09:30 10.5189 10.5389
      23 September 2015 15:30 10.5217 10.5417
      23 September 2015 12:30 10.4281 10.4481

  27. Its shocking that even a PR expert like Chileshe Kandeta can sink so low to start defending things that are clear.Unfortunately,he doesn’t seem to appreciate the fact that ‘Economic’ issues are not imagined but a reality.People will not ignore Moody’s downgrading of Zambia’s Economic outlook because it’s a fact.President Lungu is failing to take a Leadership stance in trying to mitigate the Economic hardships Zambia is going through.

  28. Sata was right to say that most of his ministers were useless. This useless tag has now spread to PF cadres at MoF. Not even Australia rejects Moody’s rating. What more with Zambia. Someone has rightly said that investors will listen to Moody’s and not to this Kadenta boy.

  29. All rating Agencies owe their duty of care to the investing community. Therefore, it is their primary duty to call the risk on any country, irrespective of any foolish arrangement with that country. This fool from MOF needs to be advised that all they are trying to do is send early warning or raise a red flag if you like, to unsuspecting investors, who would soon be getting trapped on another HIPIC programme part 2.

  30. I have seen a lot of intelligent responses here which is good. I suspect Mr. Kandeta’s denials are aimed at PF cadres who have little sense to see that the house is on fire. Moody’s is just pointing at the obvious ati guys look your bwato is leaking that’s all. Why such a reaction from GRZ?

  31. Please leave Chileshe Kandeta alone. That is his opinion. He has his own reasons and backed up data. You just can’t give your opinions based on your research to counter Chileshe’s info unless you insult

    • @ CNN

      You are wrong. It is NOT Mr. Chileshe own opinion”as a private citizen. His opinion was stated as the “opinion” (if you can call 1diotical blabbing “opinion”) in virtue of his employment in the Ministry of Finance.

  32. Cry my beloved country though I am making a fortune every moment the Kwacha slides adversely against the green buck!!

    I am betting against the Kwacha….I have less faith in current govt economic-monetary policies and practices.

    And so let the Kwacha roll on downwards….for that is the way the cookie crumbles!!

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