It says Zambia’s improving growth prospects and greater liquidity in its banking system have prompted it to change its outlook on the country to stable from negative.
The ratings firm said in a statement that this remained hostage to the government sticking to its budget plans and to outside factors over which the Zambian government has no control – the international price of copper, and rainfall.
It also based the move – which accompanied an affirmation of Zambia’s non-investment grade B rating – on an expected deal with the International Monetary Fund by the end of the year.
“Copper prices have risen by about 18 percent in 2017 and core liquid assets in Zambia’s banks by some 44 percent over the same period,” it said.
“The near-term outlook for the economy has improved in recent months,” it said, citing a bumper harvest and increased hydroelectricity generation.
It projected real GDP to grow 4 percent this year compared with 3.4 percent in 2016.