By Dr Situmbeko Musokotwane, MP, Finance & National Planning Minister
-A Fair Question from Citizens
I fully understand the question some citizens are asking:
“We hear that Zambia’s credit ratings have improved & that our Gross International Reserves (GIR) now stand at a record US$5.2 billion. But how does this help my life, my business, my family?”
This is a fair, necessary & intelligent question, & it deserves a clear, honest & simple answer.
-What These Improvements Actually Mean
These macro-economic improvements do not make everything cheap overnight. What they do is break the dangerous cycle of uncontrolled price escalation. They create a stable foundation on which farmers can plan, businesses can invest, youth can prepare for real jobs, & communities can pursue development without living under constant fear of economic collapse.
-Understanding Credit Ratings in Simple Terms
When we speak about credit ratings, we are simply talking about how the world judges a country’s ability to manage money & repay what it owes.
Just as a person builds a reputation by paying debts on time, a country also builds its reputation by managing its finances carefully & responsibly.
For some years, Zambia lost (Since November 2020) that trust when we failed to meet our external debt obligations. The period was deeply painful for the entire nation. It affected jobs, household incomes, business confidence & the cost of living.
-Why the Recent Rating Upgrades Matter
However, the recent upgrades by international rating agencies
(following the economic repair work done by the New Dawn Administration) show that the world is once again beginning to restore its confidence in Zambia’s financial discipline & seriousness.
The decisions by S&P Global Ratings & Fitch Ratings to lift Zambia out of default status formally signal that the country has turned a critical corner in restoring its financial credibility.
This renewed trust is not for The Government alone. It benefits every citizen because trust directly influences how capital flows into the country’s financial and investment ecosystem, how investors assess risk, how stable our Kwacha becomes over time, & how many jobs—subject to investments—are created in the real economy.
-The Meaning of the US$5.2 Billion in Reserves
At the same time, our country’s foreign-exchange buffers — properly called gross international reserves — have risen to an historic high of US$5.2 billion, the strongest external stability shield Zambia has ever recorded, as confirmed by the Bank of Zambia. In simple terms, this is not spending money for daily Government operations. It is a national economic shock absorber. It exists to defend the economy when pressure comes from outside — whether through drought, rising global fuel prices, pandemics, financial market shocks or sudden disruptions to imports & exports.
Just as a household keeps emergency savings to prevent collapse during crisis rather than for routine shopping, national reserves exist to protect the economy from instability, not to finance recurrent public expenditure.
-How Reserves Protect the Cost of Living
The practical question then becomes this: how does this buffer actually affect the cost of living in real life, in homes, markets & businesses?
Strong reserves protect the value of the Kwacha by ensuring that the country can meet critical foreign-currency needs even during periods of stress.
Many of the essentials our people depend on such as fuel, medicines, industrial inputs, machinery, spare parts & certain food inputs, require foreign currency. When foreign currency suddenly becomes scarce, its price rises sharply. Transport costs rise. Food production becomes more expensive. Retail prices escalate, & families suffer.
But when the country holds strong external buffers, the financial system is able to meet these demands in an orderly way. Panic subsides, speculative pressure reduces, & sudden price shocks are softened. This defensive role of reserves is one of the most powerful ways in which economic stability protects the cost of living for ordinary households.
—The Shift to Local Fertiliser Production
There is also a major structural change now underway in our economy. Zambia has steadily expanded domestic fertiliser production & progressively reduced dependence on imports. In the past, fertiliser relied heavily on foreign currency. When the dollar strengthened, fertiliser prices rose. Higher fertiliser costs forced up farming expenses. Higher farming expenses pushed up food prices. That chain reaction placed relentless pressure on the cost of living.
Following our resolve to create an environment for mass local production, import exposure has declined and farmers have become less vulnerable to sudden currency movements. Food production is becoming more predictable, supply to markets is improving, & food prices are becoming more stable. Stable food prices remain one of the strongest protections for household budgets, especially among low-income families.
—Investor Confidence & Job Creation
As Zambia’s international reputation improves, more investors are willing to commit long-term capital to our economy. Investors are bringing finance to build factories, process agricultural products, expand mining operations, develop tourism & invest in energy development. These investments are not about profit alone. They create jobs for young people. They open markets for farmers. They generate income for transporters, artisans, technicians, suppliers & traders.
As more people earn, households will become less dependent on debt for survival. Demand will become healthier, & price pressures will ease over time. Job creation remains one of the most powerful long-term tools for reducing the strain of the cost of living. It’s happening and will continue to do so as more investments come in the economy.
—Fiscal Breathing Space for The Government
At the same time, as debt pressure reduces, the Government will progressively gain real fiscal breathing space.
So, instead of struggling merely to meet interest payments, the Government is better able to plan for health services, education, social protection, agriculture, youth empowerment & support for small businesses. This reduces the likelihood of abrupt tax shocks, subsidy withdrawals or emergency fiscal measures that often hit ordinary citizens without warning.
When public finances are managed with discipline, economic change becomes more predictable & far less disruptive for families.
—Stronger Buffers for National Emergencies
The presence of strong external buffers also allows the country to respond faster & more decisively to national emergencies without destabilising the economy. If drought disrupts harvests, food & farm inputs can still be secured without collapsing the Kwacha. If a health emergency breaks out, essential medicines can be procured without triggering runaway price increases. If global fuel prices rise sharply, supply pressure can be managed with greater confidence.
Without reserves, every crisis becomes a source of panic. Panic creates shortages. Shortages drive extreme price increases. With reserves, the country absorbs shocks with order, & this order shields ordinary people from sudden suffering.
—Business Confidence & Price Stability
As stability improves at national level, businesses themselves become more confident. When businesses are less fearful, they do not rush to raise prices defensively. When fear is removed from pricing decisions, families experience a quieter, steadier cost of living. This predictability, though rarely discussed, is one of the most powerful benefits of macro-economic stabilisation.
—A Call for National Mindset & Mutual Support
At this point, it is important to speak not only about money & markets, but also about mindset, trust & shared responsibility.
As citizens, we must believe in ourselves, trust the collective direction of national reform, & support each other’s efforts in enterprise, skills development & personal growth.
Stability produces shared prosperity only when citizens rise to meet it. Business must support business. Farmers must support farmers. Traders must support traders. Youth must support youth. This is how opportunity multiplies & wealth circulates within communities rather than remaining trapped in a few hands.
—Biblical Lessons on Cooperation & Vision
The Bible reminds us in Ecclesiastes 11:2, “Invest in seven ventures, yes, in eight, for you do not know what disaster may come upon the land.” This speaks directly to enterprise, diversification & collective effort. It teaches us that prosperity grows when people act, cooperate & refuse to surrender to fear.
We are also reminded in Proverbs 29:18, “Where there is no vision, the people perish.” As a nation, we must keep alive a clear national vision — that Zambia must rise as a middle-income, prosperous nation where opportunity is not for a few but for all; where money-making opportunities are widespread; & where prosperity is shared across provinces, districts, constituencies, wards & households.
As we walk this journey together, Galatians 6:2 guides us: “Carry each other’s burdens, & in this way you will fulfil the law of Christ.” In economic terms, this means supporting each other’s businesses, mentoring the young, empowering women, uplifting farmers & refusing to leave anyone behind simply because they started with less.
—Why Partnership Between Citizens & The Government Matters
These macro-economic improvements do not make everything cheap overnight. What they do is break the dangerous cycle of uncontrolled price escalation. They create a stable foundation on which farmers can plan, businesses can invest, youth can prepare for real jobs, & communities can pursue development without living under constant fear of economic collapse. This is why the partnership between the Government & citizens is now more important than ever.
Development does not only happen in national offices. It happens in wards, constituencies & districts. It grows through Ward Development Committees & District Development Coordinating Committees. It lives through cooperatives, churches, youth groups, women’s organisations, farmer associations, private sector bodies & everyday business partnerships. These are not side structures; they are the living bloodstream of national development.
—A Shared National Mission
The Constituency Development Fund, the Presidential Constituency Energy Initiative, agricultural support, youth empowerment, SME financing & community infrastructure can only succeed if citizens remain active participants — identifying priorities, proposing projects, protecting public resources, building cooperatives, forming partnerships, monitoring progress & demanding accountability.
My call to action, therefore, is simple & sincere. Let us treat these credit-rating improvements & the record US$5.2 billion in national reserves not as money for routine spending, but as a powerful national shield that protects stability & creates the conditions for growth.
As the Government, we commit to continued discipline, transparency, protection of social spending & reforms that support jobs & incomes.
As citizens, we must believe in ourselves, trust the national path of reform, support each other’s enterprises & efforts, & work daily toward building a middle-income, prosperous nation where opportunity is real & prosperity is shared.
—A United Path Forward
If we walk this road together — the Government, the private sector, civil society, communities & individual citizens — then these national achievements will not remain distant figures in economic reports. They will be felt in steadier food prices, calmer transport costs, more reliable access to farm inputs, growing job opportunities, stronger local businesses & a more predictable life for every Zambian household.
With thanksgiving to God & profound respect for the patience, discipline & resilience shown by the people of Zambia throughout this period of reform, we should continue moving forward together into the next chapter of our national journey.
May the season ahead be marked by safeguarded stability, strengthened growth & the steady accumulation of national wealth for the benefit of all — founded on sound economic governance, responsible leadership & broad-based, multi-sectoral investment.
With sincere goodwill & confidence in our shared future, I wish every Zambian household peace, opportunity & lasting prosperity.