A common refrain among Zambians’ – ordinary citizens and politicians – is that Zambia is a peaceful nation. Since independence, October 24, 1964, Zambia has experienced a few episodes that threatened peace. Most notably: First, in 1990, there were food riots. Hooray socialism!; second, in 1997, there was an attempted coup that ultimately failed. Thankfully, Zambia did not become another stereotypical African nation; third, in May 2000, fighting between Angolan forces and the National Union for the Total Independence of Angola rebels spilled over into Zambian territory; four, in July 2001, Paul Tembo, former campaign manager to Zambia’s second president, Chiluba, was murdered after he joined the opposition and was set to testify against three ministers in a high-level corruption case; five, in January 2011, there were deadly clashes between police and demonstrators agitating for secession of Barotseland, a portion of western Zambia; six, In April 2016, there was rioting and looting following accusations that Rwandese who fled to Zambia had been involved in ritual killings; and seven, in July 2017, a state of emergency was declared after a market was set ablaze. Despite these instances, Zambia has been relatively stable. This is not conjecture. According to the Global Peace Index, Zambia is the 4th most peaceful nation in Sub-Saharan Africa and the 44th most peaceful nation in the world.
As peace is a valuable thing, in and of itself, Zambia should be applauded for maintaining peace. In maintaining peace, Zambia has achieved what many African nations have failed. However, the sad reality is that although Zambia is a peaceful nation, Zambia has not exactly thrived. Despite being peaceful, Zambia faces many challenges that must be addressed before peace is considered valuable beyond its intrinsic value. Some of the more pressing problems Zambia faces are:
- High levels of HIV/AIDS and the persistence of cholera
- A high poverty rate
- An energy crisis; and
- A looming debt crisis. These problems are likely to be exacerbated by the current Coronavirus crisis
Further, amid the current Coronavirus crisis, according to the African Development Bank, key sectors, such as tourism, mining, manufacturing, construction and wholesale and retail trade, driving Zambia’s economic growth are projected to slow down. Positively, Zambia, at least from my perspective – recognising my bias as a Zambian – with some strategic policy initiatives, Zambia can build a prosperous nation on top of its peaceful foundation.
In this piece, I will highlight some of the challenges Zambia faces, then I will discuss Zambia’s economic outlook in light of the Coronavirus crisis and finally, I will discuss some policy proposals Zambia should adopt to help it become an “African Jewel.”
HIV/AIDS and cholera
1.2 million people were living with HIV
The number of new HIV infections, HIV incidence per 1000 uninfected, among all people of all ages was 2.97
The percentage of people living with HIV, HIV prevalence, among adults (15-49 years) was 11.3%
48,000 people were newly infected with HIV and
17,000 people died from an AIDS-related illness.
To be fair, Zambia has made progress in lowering the number of AIDS-related deaths. Between 2010 and 2018 the number of AIDS-related deaths decreased by 37%. In that period, the number of deaths fell from 26,000 to 17,000. Also, the number of new HIV infections decreased from 56,000 to 48,000. In all, despite progress, HIV/AIDS remains a problem.
Besides an HIV problem, Zambia has a cholera problem. “Cholera is endemic to Zambia and outbreaks occur almost every year in Lusaka, Southern, Northern and Luapula provinces.” As recently as 2017, an outbreak resulted in approximately 5,900 cases and 114 deaths. Frankly, the cholera problem is not on the government but rather on the people. It is no secret that cholera is a dirty disease. Cholera is a disease that can be prevented by good hygiene practices.
However, as I have relayed in private conversations, Zambians are a “dirty people.” Harsh? Yes, but bear with me. It is not uncommon to see people throwing trash out of car windows. People litter in front of trash bins. People clog drainage systems with rubbish. People allow pools of water to form in front of their homes and in their yards. Homeowners and tenants do nothing to prevent the pooling of water. Rather, homeowners and/or tenants simply create a brick path to make crossing the pool easier. Public toilets are dirty and often lack running water. Please, do not get me started about the facilities at several “local” pubs. In markets, and along the roadside, cooking is done in unsanitary conditions. I am speaking mildly, trust me. I still have nightmares from the ablution block at the Zambian high school I matriculated from. All these are not scenarios that require the government to step in, people should take personal responsibility.
Beyond a HIV/AIDS and cholera problem, Zambia has a poverty problem. Poverty levels in Zambia are depressingly high. According to the World Bank, between 2004 and 2014, Zambia’s economy was growing at approximately 7.4% per year and in 2011, Zambia achieved middle-income country status. Despite this, the gains from economic growth have not benefitted all Zambians. Zambia ranks among the countries with highest level of inequality globally. Regardless, I should say, inequality is not necessarily a bad thing. This is true if those on the bottom rung of the economic ladder can make ends meets. There can be a large gap between bottom and top, but the bottom should not be hopeless. Anyway, this is a much longer discussion that need not be addressed in this piece. My preceding sentiment aside, the gains from Zambia’s economic growth have had a limited impact on poverty. “As of 2015, 58% of Zambians earned less than the international poverty line of $1.90 per day (compared to 41% across Sub-Saharan Africa) and three quarters of the poor lived in rural areas.” According to the IMF, as of 2019, Zambia’s rural poverty rate was 77% and according to the Global Peace Index, Zambia ranks in the bottom 15, of all nations, for food security. Poverty, and indeed, hunger, in times of peace is not much of a comfort.
In addition to the problems above, since 2015, Zambia has been experiencing an electricity crisis. From the onset, it is important to note, Zambia’s electricity crisis has been a long time coming. “The roots of the current crisis lie in the growing shortfall in electricity supply since 2000.” New capacity has not kept pace with economic growth. In any event, the crisis has been attributed to dwindling water-levels, or rather low water-levels, in chief reservoirs. And, to be fair, this is not a flimsy excuse because according to USAID, as of 2020, “Zambia has 2,800 MW of installed electricity generation capacity, of which 85% is hydro based.” Moreover, Zambia has experienced severe drought in the past few years. Thus, it is not surprising drought has precipitated an electricity crisis.
The pain resulting from the electricity crisis is real. In response to the crisis, the government implemented a daily load management regime that saw power cuts averaging 15 hours-a-day. Health institutions and other strategic places are exempt. In 2019, has been reported, Zambia’s electricity outages were unprecedented and household consumers rated the 2019 outages worse than those in 2015 and 2016. Indeed, households are the biggest losers. Moreover, as “national access to electricity averages at 31% with 67% of the urban and 4% of the rural population having access to power” the already impoverished are most hard hit. Poverty in darkness is a reality for a lot of Zambians.
Aside from an energy crisis, Zambia has an emerging debt crisis. According to the IMF, “total public and publicly-guaranteed debt including arrears at end-2018 was 78% of GDP.” Moreover, as reported by CNBC, in 2019, the government defaulted on a spree of loans and in 2020, Zambia’s sovereign debt is expected to reach 96% of GDP.
From reported, available, and accessible data, here is what is known about Zambia’s looming debt crisis: In 2005, practically all of Zambia’s external debt was cancelled. Zambia benefitted from the World Bank/ IMF organised debt relief under the Highly Indebted Poor initiative. However, since 2012, Zambia’s external public debt has increased. By mid-2018 external debt stood at around $9.4 billion. Additionally, domestic debt stood at approximately $5 billion, and the government had outstanding arrears amounting to approximately $1.2 billion. Further, external debt amounted to 40% of GDP and domestic debt and arrears represented 23% of GDP. These figures track closely with data produced by the Jubilee Debt Campaign. Accordingly, in 2017: Zambia’s overall international debt burden was approximately 28% of GDP, government foreign debt was approximately 33% of GDP, and private foreign debt was 36% of GDP.
It is tempting to blame China and debt trap diplomacy for Zambia’s debt predicament. After all, China is Zambia’s biggest creditor and China is one of Zambia’s major provider of finance for development. However, the reality is a lot more nuanced. First, Zambia, through the Eurobond market, has borrowed $3 billion at commercial rates: “In 2012, Zambia followed the example of several other African countries and decided for the first time to raise money in the Eurobond market at commercial rates. The response was very positive. The first $750 million loan was quickly over-subscribed, and the interest rate was a reasonable 5.6%. However, the loan must be repaid in full within ten years. Encouraged by this relative success, Zambia managed a second Eurobond loan in 2014, this time borrowing $1 billion even though the interest rate had jumped to 8.6%. Despite the high price, Zambia decided to go for a third Eurobond loan in 2015 and borrowed $1.25 billion at a 9.4% interest rate.” Second, “Zambia has borrowed from several non-Chinese sources, including bilateral government loans, loans from fuel suppliers, the Arab Development Bank, Israeli sources (for defence purposes) and from regular international banks in the United Kingdom, Nigeria and South Africa.” Third, there has been speculation that Zambia has “hidden loans” like those discovered in Mozambique. “In Mozambique, the disclosure led to an economic crisis and major conflicts with donors who provide budget support and other grants.” This speculation has been reported by Bloomberg and the speculation caused Zambia’s bonds to plummet. For what it is worth, Zambia’s Ministry of Finance has denied the existence of hidden loans.
Nonetheless, the Zambian government has recognised it has a debt problem, in addition to macroeconomic and poverty problems, and has requested help. On July 23, 2020, the IMF confirmed that “the Zambian authorities have requested IMF support for their economic program to restore macroeconomic stability, as well has assistance under our emergency financing to help address the human and the economic impact of the [Coronavirus] pandemic.” Further, “discussions continue as the authorities determine their policies and priorities in the context of their revised 2020 budget, as well as the medium-term fiscal stance needed to restore debt sustainability, revive growth and reduce poverty.”
Zambia’s economic outlook amid COVID-19
The Coronavirus crisis will likely exacerbate most problems discussed above and, in general, does not bode well for Zambia. First, “the disruption in global trade has affected Zambia’s main export commodity, copper, which generates 70% of the country’s export earnings. Second, heightened inflation and the depreciation of the Kwacha possess challenges for monetary policy making. “Capital flight and the decline in copper prices have put pressure on the Kwacha, which may lead to further decline in external reserves.” Third, the Coronavirus crisis poses a real threat to the country’s tourism sector. In recent years, Zambia’s travel and tourism industry has shown signs of health growth. In 2019, “the industry contributed 7% of GDP ($1,701 million) and 7.2% of total employment (469,000 jobs). International visitors spent $849 million, representing 10% of Zambia’s total exports.” The tourism industry will be surely strained by the Coronavirus crisis. According to the African Development Bank, due to the drastic decline in tourist arrivals, losses in tourism receipts are estimated at $800 million for 2020.
Policy going forward
Despite the problems discussed above, Zambia has the potential, through well-thought-out and properly implemented policy initiatives, to become an “African Jewel.” When, and if, that happens, other African states can be envious of more than just “Zambian peace.” Among the policies that should be implemented are:
1. As advised by the African Development Bank, “Zambia needs to invest in developing capacity and in improving and expanding the public health infrastructure. It also needs to accelerate economic diversification and promote value addition and local manufacturing to minimise the economic impacts of future shocks.” As pointed out in the World Bank’s Zambia Economic Brief, “diversifying the Zambian economy beyond minerals will entail leveraging the country’s renewable natural resources to produce continuous benefits in the long term.”
2. Although alluded to above, this point, and the next, needs its own blurb. Zambia ought to do away with the overreliance on copper. What is frustrating is this point has been discussed ad nauseam and yet for some reason Zambia has not taken heed. And, if Zambia has taken heed it has not moved away from copper fast enough. As is, the Zambian economy ebbs and flows with the price of copper. This ought to be a thing of the past.
3. Zambia ought to increase its manufacturing base. Supermarkets, in Zambia, are filled with foreign produced goods. And, as the current Coronavirus crisis is laying bare, shocks in other countries make foreign goods so expensive that ordinary Zambia’s can no longer afford to make necessary purchases. By Zambia manufacturing more goods Zambians use daily, Zambians will not be subjected to price shocks every time access to foreign goods is limited.
4. As advised in the World Bank’s Zambia Economic Brief, Zambia “needs to implement a large fiscal consolidation to reign in on the growing debt burden and create fiscal space for inclusive growth; and commitment to implementing reforms in the energy sector that would catalyze private sector activity across various sectors.” Moreover, “Zambia should consider front-loading fiscal consolidation, as that will be key to reversing course on the rising debt burden and freeing up resources to other important public spending, including on social protection.” Further, Zambia ought to enhance debt management, budget controls, and improve the operational financial viability of key State-Owned Enterprises such as ZESCO. Doing so could jumpstart Zambia’s growth rates. I should point out that I am uneasy with State-Owned-Enterprises and I would prefer that such entities be privatised. Privatisation will be more beneficial for the economy and the country. However, full exploration of this thought is beyond this piece.
5. Zambia ought to grow the agriculture sector. In 2018, the share of agriculture in Zambia’s GDP was 2.58%. The Agriculture sector, as a share of GDP, has contracted. In 2001, the share of agriculture in Zambia’s GDP was 20%. This is disappointing because Zambia has not realised it potential to be a breadbasket: “much of Zambia’s economy is dominated by subsistence agriculture and it has not yet undergone the significant structural transformation required to make it the breadbasket of southern Africa. The country is made up of 752,614sqkm of land, 60% of which is arable. This grand swathe of growing potential is made even more attractive by the fact that 40% of the water in the sub-region is domiciled in Zambia. For all its potential, the sector is underperforming. Yields are low, value chains are simple, and most farmers are subsistence producers. The product list comprises crops, livestock, and fisheries. The country’s staple crop and the one most widely cultivated is maize.” Expansion of the breadbasket is required. This can be done by research into and expansion of the drought resistance crop segment of the agriculture sector. I would add that GMOs are also an option – genetically-engineered crops are as safe to eat as their non-genetically-engineered- counterparts, they have no adverse environmental impacts, and they have reduced the use of pesticides – but I know the resistance to GMOs in Zambia. So, I will leave this fight for another day. Further, Zambians ought to dispense with their overreliance on maize. Grow more crops and, at the domestic level, eat more than just Nshima (Zambia’s favourite food made from maize meal.) I understand that maize is Zambia’s staple but surely Zambians can diversify their diets so that when maize crop yields are low Zambians do not have to starve. Nshima is not the only thing that can fill a belly. You would think this is common sense, but apparently it is not. I can already see the pitchforks coming for me for this sacrilege.
6. Zambia ought to add to its energy basket. According to USAID, as of 2020, Zambia’s energy basket breaks down as follows: Hydroelectric (85%) and Non hydro – Coal, Heavy Fuel Oil, others (15%). Persistent drought over the last few years has caused an electricity crisis as discussed above. Zambia ought to explore nuclear energy and encourage and promote investment into the nuclear energy industry. Nuclear energy has several advantages:
1. It produces energy via nuclear fission rather than chemical burning as such it generates baseload electricity with no output of carbon. Remember, carbon is “the villainous element of global warming;”
2. “Nuclear power plants operate at much higher capacity factors than renewable energy sources or fossil fuels. Capacity factor is a measure of what percentage of the time a power plant produces energy. It is a problem for all intermittent energy sources. The sun does not always shine, nor the wind always blow, nor water always fall through the turbines of a dam;” and
3. “Nuclear power releases less radiation into the environment than any other major energy source. This statement will seem paradoxical to many readers, since it is not commonly known that non-nuclear energy sources release any radiation into the environment. They do. The worst offender is coal, a mineral of the earth’s crust that contains a substantial volume of the radioactive elements’ uranium and thorium. Burning coal gasifies its organic materials, concentrating its mineral components into the remaining waste, called fly ash. So much coal is burned in the world and so much fly ash produced that coal is the major source of radioactive releases into the environment.” And for the naysayers, it is possible to have a nuclear driven energy basket. For instance, due to a long-standing policy based on energy security, France derives about 75% of its electricity from nuclear energy. Moreover, “about 17% of France’s electricity is from recycled nuclear fuel.” (Anyway, I would be remiss not to point out France is a “power” that was easily beaten in two wars yet emerged as a world power, a major broker on the world stage. Further, France, is a power that still has, for reasons beyond me – wink, wink! British necessity, and imperialism to name but two reasons – outsized influence in the Sahel and the Maghreb. I digress. Oh, digression not over, do not forget that French President, Emmanuel Macron, once said, when referring to birth rates in Africa, “when countries still have seven to eight children per woman, you can decide whether to spend billions of euros, you stabilise nothing.” Read his full statement and make of that what you will. Digression over!
Moving on, and back to the issue at hand, none of this is to say that only nuclear energy ought to be pursued. Zambia ought to pursue renewable sources such as solar and wind. Ok, maybe not wind. Windmills are not aesthetically pleasing, and they kill birds. Nevertheless, what is clear is that Zambia can no longer rely largely on hydroelectric power.
7. Zambia ought to institute more sensitisation programmes regarding HIV and cholera. It is sad to say that in 2020 more sensitisation is needed regarding cholera. Good hygiene practices should be ingrained in the Zambian psyche by now. The government should start fining people who litter and implement and enforce more control measures over the handling of food and water in the markets and the ghettos. However, Zambians please stop being a “dirty people.”
The above is not an exhaustive list of policy programmes Zambia should undertake. These proposals are just some base policies that must be undertaken posthaste. Again, it worth reminding that Zambia is peaceful – and that is meaningful – and that peace is a necessary foundation on which a prosperous Zambia can be built on. Although the Coronavirus crisis will negatively affect the Zambian economy – especially the mining sector upon which Zambia is heavily reliant – and erase some gains that Zambia was realising before the crisis, Zambia can still become an “African Giant” if Zambia addresses some structural and other issues holding it back from realising its true potential. Peace in Zambia can be more valuable – have more meaning – than merely the intrinsic value of peace. Peace can, finally, be good for something.
The views expressed in this article are Nkosi Mfumu’s own opinions and not necessarily those of Business Tech Africa.
About the author: Zambia-based lawyer (licensed to practice in the State of Illinois) holds a BA in International Studies (with a concentration in International Relations) and is also a Juris doctor.