Zambia: After Hichilema’s victory, drugs squad freezes assets of Lungu’s closest ally 

By Chiwoyu Sinyangwe
Posted on Friday, 20 August 2021 17:19

Zambian President Edgar Lungu waves to supporters after casting his ballot in Lusaka, Zambia, August 12, 2021. REUTERS/Jean Ndaisenga

After a sweeping victory in the polls that produced the highest voter turn-out in the country’s history, Zambia's president-elect Hakainde Hichilema (HH) plans to focus on fighting corruption and reforming the economy to manage public expectations especially from young Zambians who led the vote for his ascension to the presidency. Probes into former President Edgar Lungu's allies have already begun.

Hichilema amassed 2.8 million votes against 1.8 million votes for outgoing President Lungu in the 12 August election that recorded 70.1% voter turnout and ousted the ruling Patriotic Front (PF).

“This victory belongs to the men and women of Zambia, especially the youth – this was your election,” Hichilema said during his first briefing on the election of the United Party for the National Development (UPND), amplifying the role that the under-35s played in his victory. The youth accounted for more than 60% of total voters.

Lungu’s exit

In the aftermath of the dismissal performance, multiple sources within the PF and State House confirmed that Lungu was being pressured into rejecting the outcome, with his inner circle fearing prosecution after years of revelations of public looting and corruption.

However, on 16 August, Lungu conceded defeat saying he “will comply with the constitutional provisions for a peaceful transition of power.” Lungu also congratulated his long-time nemesis who he once jailed for 127 days, accusing him of treason after Hichilema’s motorcade failed to give way to Lungu’s convoy.

HH is in for a long haul and his regime has to be ready for resistance from beneficiaries [of] this corruption.

During the funeral of Jackson Kungo, the former PF provincial chairman for North Western Province who was slain during the elections as political tension heightened, Lungu revealed that he was under pressure from “some of” his “colleagues” to challenge the outcome of the election result.

“I said it was a waste of time because at the end of the day, the tension that we experienced in 2016 [was] not worth [it] because by the time we finished 14 days [election petitioning period], a lot of damage would have been [done] to the Zambian people,” Lungu said in reference to Hichilema’s unsuccessful petition against the 2016 presidential election which the Constitution Court dismissed on a legal technicality.

Hichilema’s promises

In his first interaction with the media after the election, Hichilema outlined the graft fight, economic reforms and healing the nation as his priorities. “We will have a zero tolerance for corruption but this is not a political vindictive platform […],” he said.

Hichilema is seeking to strengthen anti-corruption institutions by making them viable and independent as years of misrule and mismanagement almost rendered them toothless. “The corruption fight must be professional. It must not be used as a weapon to victimise those who were in the office, including ordinary citizens,” he said.

The Zambian chapter of Transparency International (TI) said Hichilema’s victory reflects the will of the people. “The Zambian citizens had enough of the tyranny, the lawlessness, they had enough of the corruption and the impunity that had become the hallmark of the Patriotic Front regime,” says TI-Zambia executive director Maurice Nyambe.

In the aftermath of Hichilema’s press briefing, a number of Lungu’s close confidants and business partners – including former ministers and government officials – are under probe, according to multiple sources within the country’s investigative units.

On August 18, the Drug Enforcement Commission (DEC) froze bank accounts belonging to Valden Findlay, Lungu’s closest business ally, in a move that signals the start of a graft probe that most analysts believe could surpass former president Levy Mwanawasa’s crusade that won investor and donor confidence.

“If you analyse the extent of plunder of national resources under the PF, I am tempted to believe that the Frederick Chiluba corruption (scale) was child’s play,” says Maimbo Lukangaba, a corruption investigations expert. “HH is in for a long haul and his regime has to be ready for resistance from beneficiaries [of] this corruption.”

Economic reforms

Hichilema’s focus is to renegotiate Zambia’s foreign debt estimated at $12.7bn and stabilise the mining sector to take advantage of current rally in copper prices as a way of creating fiscal space for social spending.

Under the PF regime, Zambia’s public debt position is officially 118% of the GDP but most sources say the level of indebtedness could be higher given some secret loans, especially from Chinese lenders. “Our debt is too high and it’s choking development,” Hichilema said.

“Our message to the lenders is very simple – the debt we have is unsustainable and some of it was accrued wrongly and incompetently… but today I can say to the debt stockholders that you have a new administration that will take debt seriously, that will not sit and wait until it defaults without talking to you,” he said.

Last year, Zambia became the first African nation to default on its debt in the Covid-19 era after it opted to bow out of the $42.5m Eurobond coupon payment in November 2019. The country has since halted coupon payments while the debt mountain continues to pile up.

The people are in the mood to change a lot of things but many of them are expecting results today, if not yesterday…

Zambia is unlikely to settle the issues surrounding the $750m eurobond which matures in September 2022. “We will need to reach an amicable position because our debt is too high,” Hichilema said.

“We will ask (lenders) to come to the table to discuss (our) debt and […] make an arrangement with (the lenders) that would allow us headroom to relieve resources and apply those resources on the equation side of revenue generation and not on consumption… We will need the cow to continue producing milk and we will ensure that the milk is not eaten by the owner of the cow because there is another stakeholder called the calf,” he said.

Focus on mining

The last 10 years of the PF regime have seen an unprecedented number of changes to key mining policies, depressed mining activities and in the process, Zambia’s relegation from its position as Africa’s top copper miner.

Disputes between the government and mining companies have ranged from frequent changes to the mining fiscal regime, electricity tariffs, labour laws to the state’s appetite to nationalise the mines. The sector, which is the country’s mainstay – accounting for 80% of foreign exchange receipts – remains underperforming and miners are not ramping up output to take advantage of the current rally in global metal prices.

“There must be a return on investment for the investors but there must [be] benefits to workers, mine suppliers, contractors and the Treasury,” Hichilema said. “Mines should grow to pay their fair taxes and we also expect mines to employ more citizens of Zambia. Before you look for foreign investment, you must encourage the existing ones – so, we will engage mine owners and very soon, you will see mining houses announcing expansion programme[s] and employing more Zambians.”

The PF lost its control of the restive Copperbelt province due to lack of jobs that drove people into desperation, as depressed economic welfare in the province left citizens – especially young people – disgruntled.

Managing expectations

Hichilema’s landslide victory was seen as more of a rejection of Lungu’s misrule than as a victory for the UPND.

Hichilema’s party has strongly indicated that it will seriously seek an IMF bailout package, which most economic analysts believe will hinder the president-elect’s promise of elevating spending on social sectors and expanding subsidies to cushion the majority of Zambians suffering from economic hardships that have been worsened by Covid-19.

“The UPND government must be very frank [with] the Zambian people and they have got one advantage – they have got a very good mandate given the voter support,” says Chibamba Kanyama, a Lusaka-based economist.

“The people are in the mood to change a lot of things but many of them are expecting results today, if not yesterday; but, if you are gonna get an IMF programme, you won’t deliver on most of these promises today… After 36 months, that’s when the Zambian economy stabilises and begins to grow and cater for these social services except for social cash transfers,” he said.

After a sweeping victory to power following a successful, populist political campaign, President Michael Sata (who died in 2014) and his PF started facing mounting opposition from old allies and growing discontent within a year of being in office, as young people led the revolt when the regime started failing to deliver on its campaign promises.

In 2015, the disgruntlement gained momentum following Lungu’s presidency as his rule was marred by incompetence, which saw the economy go into free-fall. There were widespread allegations of corruption, a clampdown on divergent views, and the rule of law collapsed in favour of the PF regime.

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