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Economy dominates Zambia's election

11 August 2016, 13:03Brian Ligomeka, News24 Correspondent

Lusaka - As 6.7 million registered voters in Zambia go to the polls today, the tough choice that lies before them is in identifying a presidential candidate who can turn the troubled economy around.

"We are facing a lot of hardships which include high prices of goods and services, unemployment and even power outages. We need a leader who has the welfare of people at heart," said 37-year-old Ellen Banda.

She said although she is living in the ruling party's stronghold of eastern Zambia, she will be voting for an opposition presidential candidate.

"Change is what I want to see in Zambia," she explained.

The economy has been a key focus of the candidates' election campaigning.

While ordinary citizens have been bemoaning power outages and the rising prices of goods, the problems currently characterising Zambia’s economy run far deeper.

Struggling to service debt

The World Bank in its analysis says falling copper prices, exports and foreign direct investment (FDI) have weakened the economy.

According to the bank, the benefits of gross domestic product (GDP) growth have accrued mainly in the richer segments of the population in urban areas while about 60% of the population of 17 million are enmeshed in poverty.

Zambia, which enjoyed debt relief in 2006, is now struggling to service debt which has accumulated to about $10bn and is almost half the country's GDP.

Foreign currency risks have become a reality in Zambia, as a weaker kwacha has increased the cost of servicing external borrowing.

According to the World Bank, at the end of 2015, total public sector debt had risen to 52.7% of GDP (based on estimates of 2015 GDP), driven by an increase in external debt to 38.7% of GDP in 2015 from just 17.9% in 2014.

The citizenry is angry that within four years the Patriotic Front (PF) government has incurred new debt of over $3bn.

Win predicted for Hichilema

Currently, the total debt servicing costs are estimated at 17% of the budget, or $850m.

As if that is not enough, huge trouble lies ahead of the country’s copper-dependent economy as $750m of debt matures in 2022, $1bn in 2024, and $1.25bn between 2025 and 2027.

With election-related uncertainties, persistent power shortages, low copper prices, and the government's strained fiscal position, the real GDP growth is forecast to slow to 3% this year.

Meanwhile it is the vote which will determine whether the next leader will be the current President Edgar Lungu, a lawyer by profession, or opposition leader Hakainde Hichilema, an astute entrepreneur whose profile is that of a rags to riches story.

The Economist Intelligence Unit (EIU) recently predicted a win at the polls for Hichilema.
In its analysis, the think tank said tough economic challenges are likely going to persuade Zambians to vote for change.

Second round of voting 

While there are nine presidential candidates, the elections are expected to be a two-horse race between Hichilema of the opposition United Party for National Development (UPND) and President Lungu of the Patriotic Front.

"We expect Mr Hichilema to win in the second round. This forecast is based on the country's weak economic performance since Mr Lungu came to power in January 2015," said the EIU in its analysis.

The analysis adds: "Mr Hichilema will be able to capitalise on discontent over significant job losses in the mining sector and the deterioration in living standards caused by soaring inflation, widespread power shortages and weak economic activity."

But the think tank is quick to point out that the main contenders do not enjoy the backing of a clear majority of voters, hence Zambians might go into a second round of voting.

The EIU pointed out that the setback of going into the second round of voting.

"Political stability will be weak in the near term as tensions are high around the August 11 general elections," it said.

Besides the weak economy, another factor that might contribute to Lungu's defeat in the polls is division within the ruling party.

According to the EIU, the PF is divided, with several prominent members having left the party over the past year.

Political violence

"Divisions within the PF will further bolster the UPND's prospects. Although we expect the UPND to win the most seats in the legislative election, no party is likely to secure an outright legislative majority," stated EIU.

It added: "Our forecast of Mr Hichilema winning the election is subject to significant risks: rising violence in the run-up to the vote and an election process skewed in favour of the regime have raised serious question marks over the credibility of the poll and could tilt the balance in favour of the incumbent administration."

Zambia has over the past months witnessed a series of political violence.

On Tuesday the Electoral Commission of Zambia chairperson Justice Esau Chulu expressed his sadness over high levels of political violence.

"Sadly the acts of violence that have characterised the 2016 elections campaigns [are] unprecedented and [have] marred Zambia’s historic record of peaceful elections," he said.

His statement came after PF and UPND supporters engaged in an orgy of violence in the capital Lusaka.

Last month the commission suspended campaigns in Lusaka and Namwala districts for 10 days because of violence.

"An election should not be a do or die affair. It should be about competing for who will be the best choice of leader to be elected by the Zambian people," Chulu admonished.

- News24


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