THE Government has disowned the assessment by Moody’s, a credit agency, that Zambia’s rating has deteriorated further.
Ministry of Finance public relations officer Chileshe Kandeta said the rating by Moody’s was unsolicited
and against best practices as Zambia did not subscribe to the service.
Mr Kandeta said the only ratings’ agencies that the Government engaged with on policy matters, data provision and reconciliation were Fitch Group and Standard & Poor’s (S&P).
However, S&P 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 the country’s fiscal deficit would not weaken significantly.
Mr Kandeta said in a statement yesterday that the assessment made by Moody’s should be ignored because its correctness was not discussed with any authorised representative of the Government.
He said although Moody’s rating agency had in the past made frantic attempts for a formal arrangement with the Government, this did not materialise as Fitch and Standard and Poors were deemed sufficiently competent to provide the required independent credit rating services.
“In this regard, we are pleased to announce that following a scheduled statutory review, Standard and Poor’s on Friday reaffirmed our rating at B/B long and short-term foreign and local currency credit ratings with a stable outlook, reflecting their expectation that our fiscal deficit will not weaken significantly,” Mr Kandeta said.
He said the Government was mindful of the need to maintain debt sustainability as well as sustain a favourable credit-rating.
Mr Kandeta said borrowings had been factored into the estimates and the Government had come to a credible conclusion that the country’s liability was still sustainable by all major international debt
He said the process of establishing a Sinking Fund had reached an advanced stage and resources would be set aside for this purpose from next year onwards.
“In view of the foregoing, while we welcome requests for caution and interest in our affairs, the analysis by Matt Robinson supplied to the media, supposedly on behalf of Moody’s rating agency, should be treated as an unsolicited assessment as we did not have any input into it.
“We appeal to Moody’s to restrain themselves from imposing assessments on Zambia because the act is inconsistent with international best practices governed by contractual obligations between the credit rated entity and the rating agency,” Mr Kandeta said.
Times of Zambia