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Tuesday, 13 October 2015

Zambia Budget 2016

Finance Minister Alexander Chikwanda delivered the Budget Statement 2016 on Friday. A fairly boring budget with nothing new really, which is as expected given the chaotic fiscal and monetary situation Zambia has found itself in. The only surprise is that Alexander Chikwanda has continued his overly optimistic forecasts of the fiscal deficit. It is a surprise because one would have thought a dose of realism would have set in by now. More discussion on some of the proposals in due course.

Thursday, 1 October 2015

Zambia is downgraded again!

Editor's note : The ratings agency Moody's recently downgraded Zambia's credit rating from 'B1' to 'B2' based on "sustained deterioration in fiscal and debt metrics" in the context "lower growth environment" due to weaker copper prices and electricity shortage. The outlook has been revised to stable from negative, suggesting it is unlikely to experience another downgrade over the next 12-18 months.
Moody's Investors Service has downgraded Zambia's government issuer rating to B2 from B1 . The outlook on the rating has been changed to stable from negative.

The key driver for the downgrade is our expectation of a sustained deterioration in fiscal and debt metrics that is unlikely to reverse over the course of the 3-5 year rating horizon given the challenges stemming from a lower growth environment amid an extended period of weak commodity prices, constrained copper production, and domestic electricity shortages constraining business activity.