Lungu and the political pressure cooker.

Author:Ntomba, Reginald
Position:Feature: ZAMBIA

On 23 September, the governing Patriotic Front (PF) marked four years in power and Zambia is celebrating 51 years of independence this month amid pressure-cooker political posturing as the campaign for next year's general election beckons. But as Reginald Ntomba, a simmering rebellion in the ruling party and mounting economic challenges are ramping up the pressure on President Edgar Lungu (pictured below).

Finance Minister Alexander Chikwanda's mid-year economic and budget review, delivered to parliament in June, was forbidding. Zambia's budget deficit had ballooned from the expected 8.5 billion kwacha, to 20 billion in just the first half of the year. The growth target was pared down from 7% to 5.8%, while some government projects were shelved due to insufficient funds.

In 2014, Zambia raised mine taxes with the hope of maximising revenue from its richest sector. But mining companies fought back and blackmailed the country with thousands of job cuts. The government capitulated and reversed the taxes. Without the expected revenue from the mines, the 2015 national budget effectively collapsed.

Worsening the economic outlook is an acute power shortage undermining industrial output. The kwacha has hit its lowest point in decades, placing a huge strain on the import-dependent economy.

To plug the deficit, government has increased its borrowing. In July it issued an additional $1.25 billion Eurobond, which raised its total external debt to nearly $7 billion. Economists warn the country is sliding into a debt trap, a view the Treasury dismisses, insisting the debt is "within manageable levels". Concerns over debt are not from without. Ten years ago, Zambia's $7.2 billion debt was written off under the Highly Indebted Poor Countries' (HIPC) initiative. But the Patriotic Front (PF) government, in power since 2011, has significantly increased borrowing to finance its ambitious infrastructure projects, initiated by the late President Michael Sata. The government justifies the borrowing on the need to expand public infrastructure. Indeed a number of new roads, bridges, schools and hospitals have been built. The construction sector is experiencing an unprecedented boom. In addition to government financed projects, the private sector has weighed in with several mega housing estates, shopping malls and office complexes. As once noted by vice president Inonge Wina: "The whole of Zambia is a construction site."

And while acknowledging the importance of new...

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