  Countries in Africa that are in this class, lower middle income, include the following Angola, Cameroon, Cape Verde, Republic of Congo, Côte d’Ivoire, Djibouti, Arab Republic of Egypt, The Gambia, Ghana, Lesotho, Mauritania, Morocco, Nigeria and São Tomé and Principe. IMPLICATIONS OF SOVEREIGN CREDIT RATING   The rating that has been assigned to Zambia reflects strong economic performance as shown by the GDP growth rate. This has also been supported by low rate of inflation and fiscal deficits, external sector performance supported by the mining sector, and activities in key economic sectors, including agriculture and tourism, as well as strong external balance position after huge debt relief from international creditors obtained in 2005.   The rating puts the Zambian business community and government in a strong position to access finance globally at risk adjusted interest rates for investment that is essential for sustained economic growth and improved living conditions of the citizens.   Furthermore, the rating entails transparency in the economic management of the country’s resources and provides an opportunity for the country to work on the weaknesses identified by the rating agencies. For instance, from the rating report it was noted that Zambia still faces challenges in the energy sector and infrastructure development. It therefore, follows that once the country addresses the identified weaknesses, the rating could improve.   In summary, the rating assigned to Zambia shows stability and predictability of government policies and signals improvements in the business environment. This is also comparable to our peers in Africa.

It is also worth noting that common debt issued under the SURE programme (Support to mitigate Unemployment Risks in an Emergency) and even more so the Recovery Fund will make the European Union one of the largest debt issuers in Europe relative to national sovereign debt issuers over the coming years. These changes do not seem to have altered the good functioning of the euro zone sovereign market. On the contrary faced with the economic and financial shocks triggered by the corona virus pandemic, they have fared well and proved resilient. They have consequently strongly helped, with the banking system, governments and the Eurosystem to implement forceful policies that have proved effective to help the private sector to absorb those shocks. In my initial remarks today I would like to highlight some dimensions of this resilience, looking in turns to bond and the repo market but also highlight a few vulnerabilities and point of attention from a financial stability standpoint that the role and functioning of Eurozone sovereign markets during the crisis has also revealed. 1. The resilience of European sovereign markets a) Regarding the sovereign cash market, its resilience during the crisis is first illustrated by financing conditions, which have remained favorable since March 2020. In 2020, yields on euro area country sovereign bonds continued to decline, to record lows including for the euro area’s most highly indebted countries, despite the strong increase in debt issuances ; and the dispersion of yield spreads between countries also narrowed.