NEW DISPENSATION

No time to lose — Zambia’s new president has an overflowing in-tray

The elephant in the room is Zambia’s external debt, which is officially pegged at $13-billion, the bulk of it owed to China

In Summary

• The former businessman can take the lead in showing the world, and Africa, how to set about addressing a myriad of urgent economic and political issues

• Only by overcoming these challenges can millions of Africans be freed from the state of hopelessness to which they have been condemned by decades of poor governance.

United Party for National Development (UPND) leader Hakainde Hichilema when he cast his vote at Lusaka, Zambia, August 11, 2016. /REUTERS
United Party for National Development (UPND) leader Hakainde Hichilema when he cast his vote at Lusaka, Zambia, August 11, 2016. /REUTERS

As the dust settles in Zambia following a landmark electoral victory by President Hakainde Hichilema, the hard work must now begin.

Africa’s latest poster boy must show he means business.

The former businessman can take the lead in showing the world, and Africa, how to set about addressing a myriad of urgent economic and political issues that afflict his country and the wider continent or he can become another “false dawn”.

Only by overcoming these challenges can millions of Africans be freed from the state of hopelessness to which they have been condemned by decades of poor governance.

The first opportunity to underline that he means business comes in a week’s time when he addresses the United Nations General Assembly in New York.

The UN event and other side-line meetings, including ones with the Managing Director of the International Monetary Fund and the president of the World Bank, will be followed by a rare face-to-face meeting with a sitting US President.

The fact the meeting with Joe Biden was arranged so quickly after Hichilema’s victory is significant.

He must take maximum advantage of the honour to address Zambia’s manifold problems. These are more or less the same as those faced by nearly every African country.

But let us first deal with Zambia’s domestic problems!

Domestically, President Hichilema in his maiden address to Parliament last week set out a clear and impressive ambitious plan to turn around the country.

His plan foresees a strategy to deal with cyclical fiscal policy and structural bottlenecks in mining, the lifeblood of the nation, and includes reviving Zambia’s moribund manufacturing sector.

The latter is critical to creating jobs for millions of people, mainly the young.

He has also promised to revamp and expand tourism, in a country that is home to one of the world’s seven natural wonders, the Victoria Falls.

Agriculture, a cash cow waiting to be harnessed is also firmly in his sights — not before time for a country blessed by fertile land and abundant water supplies.

This is an impressive vision, which if supported by appropriate strategies and actions and the requisite institutional capacity the country urgently needs to rebuild, will put Zambia on the path to a developmental State.

It is this path of developmentalism that both China and Singapore took.

These two countries have more than any other nation done so much to narrow poverty and inequality levels in their countries.

But for a developmental state to succeed and flourish it needs a cocktail of an effective state, strong institutions working side by side with market forces but guided by strong clearly-defined policies.

Clear policies, policy consistency, a strong and dynamic team in government that understands and follows the President’s vision, and strong institutional capacity is what Zambia needs to sort out issues in the mining sector, where even accurate production figures are sometimes hard to come by.

This simply means that Zambia has no capacity to accurately project and collect taxes — vital to driving economic development.

However, the elephant in the room is Zambia’s external debt, which is officially pegged at $13-billion, the bulk of it owed to China, although the exact figure is contested.

Some argue that given the opaque nature of debt contraction under the previous government, the figure could actually be higher.

That aside, the debt issue will present President Hichilema with the biggest headache of his presidency.

He will need to have a frank discussion with China on how to tackle this thorny issue.

Some of these discussions will no doubt take place on the sidelines of the United Nations General Assembly. No doubt, this matter will also be at the centre of the talks with President Biden.

While conventional geopolitical thinking prescribes that the US will try and shift Zambia away from the influence of China, President Hichilema must avoid the Cold War policy of playing one big power against the other.

He should instead get the best for Zambia out of each power. For China, this means sorting out the debt issue in a transparent manner and ending Zambia’s state capture by Chinese companies.

For far too long, we — Zambians and Africans alike — have blamed China for lopsided and exorbitant procurement contracts.

But truth be told the fault lies squarely with Zambia itself. Why is it that the same Chinese state-owned and private companies operate above board when working in countries such as Botswana, South Africa, Mauritius or Rwanda?

It is because these countries have prioritised national interests above personal ones, and have invested in institutional capacity. The time for Zambia to follow suit has come.

As he meets with President Biden, Hichilema will no doubt tackle two other issues, Covid-19 and US support to help Zambia contain it through the strengthening of our health facilities so we are better prepared for future waves of the pandemic.

Scientists are already warning of a deadly fourth wave of the pandemic.

General economic support will no doubt be needed. The two are interlinked because Covid-19 presents the biggest challenge to economic construction.

On the economy, Zambia must avoid putting too much emphasis on an IMF agreement, with unintended social consequences.

American support must focus on strengthening institutional capacity so Zambia can accurately collect taxes, build a thriving manufacturing sector, create jobs and drive economic development.

It is an open secret that International Monetary Fund policymaking is heavily skewered towards the free-market economic and political imperatives of the US and Western European nations which are not always those best suited to emerging nations.

We must ensure we receive support that is pro-development and pro-growth. The time to think outside the IMF box is now.

For Americans keen to learn about how President Hichilema will respect the rule of law, good governance and sound democratic principles, the message will be unequivocal that Zambia is back among nations governed by constitutional and democratic principles.

It is this message that other African nations must surely emulate as Africa seeks to chart a new course of hope for its suffering citizens.

The author is the co-founder and director of Leriba Consulting Ltd which provides in-depth analysis and tailor-made business advice for investors in Africa. Email: [email protected]