Editor's Note

Putting the debt into perspective

Zambia’s total debt (foreign and domestic) stood at $8.65 billion as at December 2015, equivalent to a debt-to-GDP ratio of 52.7% as of 31 October 2015, according to Deputy Finance Minister Christopher Mvunga, who assured parliament that this was still below the indicative threshold of 56% for public debt distress.

This could probably do with a bit of perspective: through the Highly Indebted Poor Country (HIPC) and Multilateral Debt Relief (MDR) initiatives, Zambia reduced its national debt from $7.1 billion in 2001 to less than $1 billion in 2006.

When the former MMD government exited in 2011, national debt amounted to about $4 billion. Thus, the MMD increased national debt by about 400% in the five years from 2006 to 2011, while the PF has increased debt by about 120% in the four-and-a-half years from 2011 to today. The PF can therefore not be said to have borrowed excessively in comparison with the MMD.

However, our current debt is definitely bigger than before Zambia was granted debt relief. The whole idea behind debt relief was to provide the economic space to develop, and one could therefore extrapolate that we have borrowed ourselves into a financially tight corner with no room for development going forward. Yet, Zambia’s economy – and its ability to pay off debt – has grown a lot since 2001.

All we can do is to hope that the borrowed money has been put to good use in properly prioritised, planned and executed capital projects with the ability to sustain the economic return necessary to pay back the loans…


camilla
Camilla Hebo Buus, Editor Zambia Weekly
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This Week’s Exchange

Nic Cheeseman, professor of democracy and international development, Birmingham University, UK, stated:

“Until now, Zambia’s progress under multi-party politics has been quietly impressive. Over the last year, though, things have changed. (…) According to the Conference of Catholic Bishops – one of the most influential bodies in the country – Zambia doesn’t deserve to be called a democracy (…) it has become a dictatorship – or getting there. Many Catholic leaders were seen to be sympathetic to the PF, when it won power under Michael Sata in 2011, so what has changed? This is not the first time that a Zambian president has sought to consolidate his authority by manipulating state institutions. Nor is it the first time that opposition leaders have been arrested, or civil society groups intimidated. In the recent past, these moments of high political tension have often been resolved peacefully, (…) but it’s unlikely that Lungu will cede his quest to remain in office. First, key civil society groups such as the trade unions have been weakened by privatisation, informalisation and unemployment. Second, the Constitutional Court, that’s responsible for interpreting the constitution, was handpicked by Lungu. Third, Lungu’s case is more complicated than Chiluba’s. In 2001, the second president had served two full terms in office and wanted one more. Today, Lungu is arguing that he should be allowed to have a third term because his first period in office did not count, as he was just serving out the final year of Sata’s term. All of this means that Lungu is likely to get his way. (…) Opposition protests are inevitable, as is some civil society criticism. If past form is anything to go by, Lungu’s government will respond with threats and intimidation.”

Ruling PF party deputy secretary general Mumbi Phiri reacted:

Cheeseman is nothing but an attention-seeking professor, who thinks he can lecture us about democracy. The people of Zambia spoke through the vote, and their wishes must be respected by all, including Cheeseman. Cheeseman creates the impression that there was a letter authored by all Catholic bishops, which labelled Zambia as a dictatorship. For the record, that was an opinion expressed by the archbishop. (…) It is irresponsible for Cheeseman to compare ours with late President Frederick Chiluba’s third-term bid. The view that the current constitution allows President Lungu to seek re-election (…) is before the courts of law. (…) the PF will respect the outcome of the court system. President Lungu’s good governance record remains solid. It was President Lungu’s administration that took the referendum on the proposed Bill of Rights to the people. (…) it was UPND leader Hakainde Hichilema who campaigned against it. It is President Lungu’s administration, which allowed for the 50%+1 clause in the constitution, the running mate clause, and reduction of presidential powers. President Lungu believes in an independent judiciary. (…) Today, Zambia has a Constitutional Court, something that was unheard of in the history of our nation. While the opposition petitioned the Constitutional Court, President Lungu remained calm until the matter expired. We wish to correct the view that human rights of politicians in trouble with the law are being violated. Citizens, who are also politicians, and on trial, have appeared in court within a week of being charged, and (…) for continued trial. The due process of the law is clearly being followed to the letter. Professor Cheeseman‘s daydream, that Zambia is falling from grace because of HH’s arrest, is a lie. Zambia remains a shining example of democracy not only on the African continent but world over.”