Business

Growth impresses StanChart

Zambia’s ceiling at B+ after State’s strides since October 2013
ANGELA CHISHIMBA, Lusaka
ZAMBIA’S continued economic growth has earned it a positive rating by Fitch, reaffirming investor confidence, Standard Chartered Bank chief executive officer Andrew Okai says.
Fitch revised Zambia’s outlook from stable to positive, and affirmed the country’s ceiling at B+, which is in recognition of the strides that Government has made since October 2013 when the rating and outlook was downgraded.
Mr Okai, in an interview on Tuesday, said the reason for the downgrade by Fitch a year ago was as a result of the fiscal deficit and high interest rates.
“These have been addressed because, if you look at the projected deficit for last year and the projected deficit for this year, it shows that there has been progress made,” he said.
In determining the sovereign credit rating, Fitch, one of the world’s top three rating agencies, noted Zambia’s significant progress in economic growth, prudent fiscal management, and stability in the policy environment.
Mr Okai said Government took a number of actions to address some of the underlying issues that had been raised at the time. “This has given Fitch the confidence because while we saw the volatility in the Kwacha earlier in the year, the national debt to GDP (gross domestic product) ratio is looking healthier after rebasing of the Kwacha.”
He also highlighted concerns on how much Government was borrowing, as well as the country’s reserves as having been addressed.
“The central bank has reported that the reserve position of the country is healthier than it had been…These positive signs are what Fitch has put forward and emphasised as the reason for their rating the country to a positive outlook,” Mr Okai said.

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