Tag: Edgar Lungu

Zambia Sovereign Debt Crisis

On By Dr. Y.In Great Moments4 Comments
Zambian flag
Zambian flag

When we talk about Zambia these days, there is no way to avoid the elephant in the room: its debt. In 2020, Zambia became the first African country to declare bankruptcy (possibly worldwide) as the pandemic had brought it to its knees: the coffers were empty, and the country owed China, its main creditor, over $3 billion with no clear way to pay it back. This past Tuesday, the IMF announced that Zambia was seeking as much as $8.4 billion in debt relief in preparation for discussion on restructuring foreign liabilities. African debt as Thomas Sankara pointed a while back is a tricky subject… so there is already that fundamental question of debts owed to European countries (like France) which milk Africa via fake currencies such as the FCFA, and treacherous partnerships signed decades ago which benefited only the West. For today though, how did Zambia get here in the first place?

President Edgar Lungu (Source: AllInZimbabwe.com)

The country’s debts quadrupled between 2014 and 2019 amid a surge in infrastructure borrowing under Edgar Lungu, the former president, who lost elections last year to Hichilema. Needless to say that right before Lungu came into power, there had been a collaboration between Norway and Zambia to help the country get better hold of its revenues, via a mineral mining monitoring project aimed at boosting tax revenues. As we learned at the beginning of the week, Zambia is rich in minerals, particularly copper. However, upon arrival in power, president Lungu stopped the program (aimed at helping its country negotiate better deals for its mines), and went into an infrastructure shopping spree with no real regards for what was in his treasury’s coffers; no wonder he got the boots at the end of his first term. This, added to all previous debts, and the pandemic which hit just as the new president was getting into office, made for the perfect storm.

Excerpts below are from the Times talking about Zambia’s discussions this week, and hopefully the start of a better way to close on the debt. Let’s not veil ourselves though, since its creation has the IMF ever helped a single African country come out of problems? Hard to believe that it will – maybe the case of Zambia will be different? You can also read articles from Bloomberg, Atlantic Council, and Financial Times.

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Map of Zambia
Map of Zambia

Not that long ago Chinese credit was easy to get in Zambia. A government department could contact a Beijing lender directly without needing to get it signed off by finance ministers.

Millions of dollars were squandered or used to line pockets. Ministers campaigned in helicopters and the president had a Gulfstream jet. All the while the debts were racking up. It could not last.

“We have lost an obscene amount of money on corruption — money that could have been used to feed, house, clothe and educate our children,” said Hakainde Hichilema, a man once mocked as “calculator boy” for his head for dry numbers.

President Hakainde Hichilema (Source: FaceofMalawi.com)

A year after securing the presidency — at his sixth attempt — in a landslide, Hichilema is unpicking the ruinous rule of his predecessor, Edgar Lungu, who threatened to turn Zambia into the new Zimbabwe.

Under Lungu’s administration, international debt quadrupled to more than 120 per cent of Zambia’s GDP. He failed to negotiate a lifeline from the International Monetary Fund (IMF) after it became the first African state to default since the 2005 agreement to wipe clean the debts of 30 of the continent’s poorest states.

The $1.3 billion IMF bailout secured by Hichilema’s government last week was seen as a huge vote of confidence in his commitment to restraint and reform. A successful exit from default could make Zambia a model for other states in Africa, where China is the biggest lender and the threat of debt distress is high. China has overtaken the World Bank as the biggest foreign creditor to developing countries.

… Zambia’s debt of $6 billion to 18 different lenders was twice previous estimates.

… New laws on transparency and a cap on future borrowing will keep things honest, [Hichilema] said. “The only change we can probably say is that we have just raised the bar in terms of engagement.”

…

So Long to Kenneth Kaunda: Zambia’s First President

On By Dr. Y.In Great Moments, Great People8 Comments
Kenneth Kaunda
Kenneth Kaunda

Last Thursday, the first president of Zambia, Kenneth Kaunda, changed dimensional plane to join his ancestors. At 97 years old, he was one of Africa’s last surviving liberation leaders. To a generation of Africans, and to many of us, Kenneth Kaunda epitomized the African struggle for independence.

Born into a family of 8 children in Lubwa in the north of then Northern Rhodesia (now Zambia), Kaunda was the last born of parents who immigrated from Nyasaland (Malawi). He trained as a teacher, then became involved in politics, first as secretary of the local young men’s farming association and later as a founding member of the Northern Rhodesian African National Congress in 1949. In 1955, both him and Harry Nkumbula, party president were imprisoned for 2 months. Later Kaunda broke away from the ANC, to found his own party, the Zambian African National Congress (ZANC) in October 1958 which was short-lived. In March 1959, the ZANC was banned and Kaunda was sentenced to 9 months‘ imprisonment, which he spent first in Lusaka, then in Salisbury When he was freed from prison in 1960, he joined the principal nationalist party, the United National Independence Party (UNIP), which campaigned and fought against British colonial rule. He was influenced by Martin Luther King Jr. and Kwame Nkrumah, both of whom he met on different occasions. On 24 October 1964 he became the first president of an independent Zambia.

Zambian flag
Zambian flag

Kaunda started with the great advantage of leading an African state with a stronger economic base than any of its neighbors but there was a shortage of native Zambians who had the skills and training to run the country [similar to so many African colonies… the Europeans were there to pillage and exploit the resources of the countries, and not build their local forces!]. The policy of sanctions imposed by the British government on the breakaway country proved at least as damaging to the Zambian economy (similar to what they did to Zimbabwe under Mugabe– Is Zimbabwe the New Haiti?) over the years, probably as punishment for his support for the liberation of his neighbors.

Affectionately known as KK, or Mzee, Kaunda worked tirelessly towards to the freedom of the whole of Southern Africa from white rule; he supported the fight of other countries against repressive, racist regimes in South Africa, Namibia, Angola, Mozambique and Southern Rhodesia (Why the name: Zimbabwe?). It took several years, but his support never faltered.

He remained a staunch defender of the Zimbabwean President Robert Mugabe [Robert Mugabe, Freedom Fighter and First President of Zimbabwe Lives On], and said, “I’ve been saying it all along, please do not demonise Robert Mugabe. I’m not saying the methods he’s using are correct, but he was put under great pressure.”

As a testimony, President Hage Geingob of Namibia said in a statement “Africa lost“a giant of a man. …Kenneth Kaunda was a generous, affable, and a resolute leader who freed our region from colonialism.”

Photo taken on February 28, 1990 showing Zambia’s president Kenneth Kaunda (Center) and South Africa’s African National Congress (ANC) leader Nelson Mandela (L) attending a press conference at the Presidential House in Lusaka. (Source: AFP)

South Africa’s President Cyril Ramaphosa described Kaunda as a “rightfully revered father of African independence and unity… Under his leadership, Zambia provided refuge, care and support to liberation fighters who had been forced to flee the countries of their birth.” “He stood alongside the people of South Africa at the time of our greatest need and was unwavering in his desire for the achievement of our freedom. We will never be able to repay the debt of gratitude,” Ramaphosa added.

“For our founding father, it was not enough for his country Zambia to be liberated when the region and the African continent remained bonded in the shackles of colonialism and apartheid,” current Zambian President Edgar Lungu told mourners at Kaunda’s house in Lusaka … “[Kaunda] soldiered on to seek freedom for humanity.”

Please enjoy articles on the Al-Jazeera and the very good article by the Global Times [With love and respect, Chinese people cherish memory of Zambia’s Kaunda, ‘an old and good friend’]. Please watch the video I posted a few years ago on the great Kenneth Kaunda, Zambia’s first president.