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Is Zambia Being Punished for Friendship with China?

Zambia`s former president, Edgar Chagwa Lungu has questioned the results of Zambia`s recent elections held on the 12 August. He said that the elections had not been free and fair due to violence in parts of the country .

Many dispute the likelihood of a win by the opposition party that has run 6 times in the past without success. However, continuing in the tradition of this peaceful nation, Edgar Lungu`s party, the Patriotic Front (PF), has handed over to the new government of Hakainde Hichilema of the United Party for National Development (UPND).

The Patriotic Front (PF) has been in government since 2011 when Michael Sata became the first PF president. He died in office in 2014 and his position was filled by Vice President Guy Scott. Edgar Lungu took office in 2015.

Why Poverty?

Copper is Zambia`s main source of revenue. Copper mining has been the monopoly preserve of London since the days when Zambia was called Northern Rhodesia. Rhodesia was named after the British arch imperialist , Cecil John Rhodes who ruled the region on behalf of London, under the auspices of the British South Africa Company.

Edgar Lungu continued with the policies of Michael Sata and Guy Scott, in taking on the predominantly City of London based mining corporations operating in Zambia, namely Glencore. Mining royalties of Zambian copper were increased from little over 6% to 20% in 2015.

Former Zambian President Lungu greeting Chinese Civil Engineers

Zambia is Africa`s second largest copper exporter, the largest being the Democratic Republic of Congo. Despite the ups and downs of the selling price of copper, Glencore Xstrata continues as one of the world`s largest commodities traders. It is an Ango-Swiss MNC which is registered in the British off -shore tax haven of Jersey. While Zambia continues to be one of the poorest countries in the world and the majority of Zambians continue to live in poverty.

In 2011 Glencore was accused by a number of ngo`s of crooked accounting and financial manipulation in a tax avoidance scheme that resulted in loss of revenue to the Zambian government to the tune of hundreds of millions of dollars.

This scandal was covered in a documentary by Christoffer Guldbrandsen,which delves into illicit financial outflow from Africa`s resources and in particular the case of Zambian copper. The documentary is called `Stealing Africa` and is as pertinant today as when it was made in 2012.

In 2015, Hakainde Hichilema promised to reverse the mining tax in favour of the corporations and foreign investors. Unfortunately, it seems that Hichilema will now be in a position to implement his policies. It remains to be seen if he will go as far as to turn Zambia away from a very old friend, China. His election win caused an explosively jubilant response from the anti-China faction in Washington.

In his inaugural speech, President Hichilema promised : “We will foster a better democracy… rule of law, restoring order, respecting human rights, liberties and freedoms.”

President Biden`s government has applauded Hichilema`s win as” a tribute to the democratic ideals upon which the country was founded and an inspiration for the democratic aspirations of people around the world.

President Hichilema, it appears will be returning Zambia to the neo-colonial fold of the IMF and its `rules based order` of so-called human rights and democratic values which comes as a package that gives expansive IMF loans that  always have strings attached  and intended for soft infrastructure only. In return, recipient countries must produce a relaxed investment climate ( a liberalized economy) that favours multi national corporations and their shareholders over national development of the physical economy i.e hard infrastructure.

Debt and China

Zambia was the first African country to default on its debt to the IMF post COVID-19. The debt was in Eurobonds. Perhaps Lungu`s government had no intention of paying this particular debt but as Zambia stood alone on that front at the time, it was a war that could not be won. There is now an increasing call for the renunciation of Africa`s debt in a campaign being led by Ghana.

Times are hard in Zambia. There is very high unemployment, increased since the Covid-19 pandemic, inflation is soaring, food , fuel and electricity have gone up and millions of Zambians are struggling. Food prices have risen by 33% in the last 12 months.

The government under Edgar Lungu has focussed on much needed infrastructure. Working with China, the friend of Zambia since 1964. The country has seen an infrastructure build that rivals anything in the SADC region ( Southern Africa Development Community).

During Lungu`s administration,activists from the Zambian opposition party were always vocal in spreading anti-China propaganda, protesting against China`s `debt trap` and demanding President Edgar Lungu #sayno2China. They claim that Zambia is so indebted to China that China effectively owns Zambia, hence the activists new name for Zambia- `Chambia`.

Former President Sata and Vice President Scott

As president, Edgar Lungu, hit back at critics and said:

“I implore you to ignore the misleading headlines that seek to malign our relationship with China by mischaracterising our economic cooperation to mean colonialism.”

The Finance Minister, Margaret Mwanakatwe, put the record straight and told critics that of the total interest paid to creditors in the first half of 2018 only 30% was to China.

Leading Zambian economist and head of Zambia’s Private Sector Development Association Yosuf Dodia said that Chinese investment should be seen as an opportunity not a burden.

“Zambia has been dominated by the West for 100 years… and we are seeing poverty all over the continent,” he said.

On Zambia`s relationship to China he said “The partnership level is around $10bn – and that is good. There is no other country that offers those kinds of opportunities.”

That is the general consensus of African governments who defend the Chinese model. Compared to other creditors ( like the IMF) Chinese banks offer far better terms. The interest is, in some cases, non-existent or else at very low rates of interest. There are lengthy periods of grace before payments commence and much longer re-payment periods.And unlike Western banks, the Chinese banks are lending, extending credit for the express purposes of uplifting the standard of living of African nations by funding hard infrastructure.

In 2018, at the historic Forum for China-Africa Cooperation (FOCAC) in Beijing, Zambia secured a $30 million interest-free loan and a $30 million grant .

Along with the spreading of anti-China propaganda, xenophobic attacks on Chinese nationals are also on the increase. It would appear that the resentment felt by a few is being fuelled by the same anti-China critics. In other words the xenophobia is opposition run as is evident in an article from Xinhuanet which reported a demonstration held by Zambian miners in Kitwe City, Copperbelt Province to protest against opposition politicians who have been inciting xenophobic attacks on Chinese investors.

The Road to Zambian Transformation:

Energy Sector Developments

Zambia, like all sub-Saharan African countries, has an acute energy shortage.Only 25% of its urban population and 3% of its rural population have access to electricity.

Currently 90% of Zambia`s electricity is from hydro-power. Between 2015-2016 Zambia lost power capacity and the economy dropped by 40%.This was a result of prolonged regional drought which made existing hydropower ineffective.

Nuclear energy would be a far more reliable source of power generation in African countries such as Zambia that are prone to drought when under the adverse effects of the El Niño weather system.

Recent years have seen great interest in pushing forward Zambia`s nuclear program. Under the presidency of Edgar Lungu steps were taken to fast track a nuclear power program.

In April 2019, Dr Roland Msiska, Head of Zambia`s Atomic Agency (ZAMATOMA), led a delegation of officials and journalists to the annual ATOMEXPO which is held in Sochi, Russia, and run by ROSATOM. The journalists were tasked with learning about nuclear technology, including its multiple uses, medical and agricultural, apart from energy production. The journalist have since tackled the many misconceptions held by the public on nuclear technology.

Dr Roland Msiska, said:

“Nuclear is the technology of Zambia’s future”…”One nice thing about nuclear programme, because of the length in which you have to plan, about 200 years, you’ll have to think inter-generationally because that’s four generations. That’s 20 presidents, if you are talking about each president [serving for] 10 years. You have to plan inter-generationally and implement inter-generationally.”

As key to initiating the nuclear program, government started the Centre for Nuclear Science and Technology which is a vehicle for training personnel who will operate the plant and will advance Zambia in science and technology.

The design, feasibility study and approvals for the project have been concluded but as of March 2020, finances are still being arranged between Zambia and Russia.

There are 2 phases of construction, the first being the construction of a Center for Nuclear Science and Technology and the second phase will be construction of a nuclear power plant of 2,400 megawatts capacity.

Hydro

Kariba North Hydro Power, Zambia

Kariba North Bank hydropower plant is a recent extension of the Kariba Dam Hydropower Plant. In 2013 280MW were added and another 80MW in 2014.

Itezhi Tezhi hydroelectric project ( 60MW) is another of the recent constructions which are all contributing to increasing Zambia`s electricity needs.

The much larger Kafue Gorge Lower Hydropower Station is funded mostly by China. The Chinese Sinohydro Corporation have been awarded the construction contract. It will supply 750MW which will increase the national energy capacity by 38%.

Water Sanitation

Water sanitation is an extremely important sector of hard infrastructure. The acute lack of it in most African countries is the greatest cause of easily preventable diseases. In addition, time collecting water is an unnecessary waste of time and a burden that usually falls on women and young girls.

China State Construction Engineering Corporation (CSCEC) has been awarded the contract for water sanitation improvement projects Zambia`s Northern Province’s two districts of Kasama and Mbala.

Road , Rail and Supporting Infrastructure

China`s first act of solidarity with the newly de-colonized Zambia in 1964, was to construct the Tanzam Railway, also called the Uhuru (freedom)or Tazara Railway, which runs from Zambia to Tanzania. China built 1,860km of railway from Kapiri Mposhi in Zambia’s Central Province to Dar es Salaam, Tanzania`s main port.The line was completed in 1975. The idea was to assist Zambians in exporting their copper reserves. London`s leaverage over the government of Kenneth Kaunda was under-estimated at the time! It would take another 47 years before Michael Chilufya Sata would take on the herculean task of confronting corporate colonialism.

Kazungula Bridge

This is a very important part of the Trans-Africa North-South Corridor and is a road and railway bridge connecting Botswana and Zambia over the Zambezi River, currently only having a ferry service. It is 930m long and 18.5m wide.It will connect Central and Southern Africa and connect to sea ports, namely Durban in South Africa and Maputo in Mozambique. The bridge is completed and once legalities of the two new border posts are finalized, it will be opened. The bridge is a vital connection between Botswana, Zambia, Zimbabwe, Mozambique, Democratic Republic of Congo, Malawi and South Africa.

See Also

Kazungula bridge

Botswana`s Minister of Transport and Communications, Mr Thulagano Segokgo,said :

“This state-of-the-art infrastructure will among others facilitate quick access to international markets through connectivity with major seaports as well as contribute to maximizing the operational efficiency of the corridor and enhance regional economic integration…Our strategic partnership in the project should enhance development and competitiveness of our economies to improve the prospects of attracting more private sector investment and create the much needed jobs.” Source:

http://www.dailynews.gov.bw/news-details.php?nid=59052

Mongu-Kalabo Road

Mongu-Kalabo Road.

This road spans the Barotse floodplain on the Zambezi River in western Zambia. Completed in 2016 it incorporates 26 bridges and is 34km long. It was an extremely challenging construction across one of Africa`s greatest floodplains.

Airports

Re-building of the Kenneth Kaunda International Airport and the new airport at Ndola have both recently been completed.

The Simon Mwansa Kapwepwe International Airport at Ndola was financed by China`s EXIM Bank and designed and constructed by Chinese company, AVIC International. The ultra-modern airport’s design includes a 12,000 square metre terminal building which can accommodate one million passengers.

The Simon Mwansa Kapwepwe airport

Urban Development

Recent years have seen a boom in the construction sector in Zambia with the building of shopping malls, up-market hotels, residential areas and office blocks. Construction is currently the largest industrial sector of Zambia comprising 27.5% of the GDP with a growth rate of 12% in 2016.This has led to a growth of Zambian construction companies and companies supplying building materials. It has increased the demand for professional employment such as architects and engineers and construction workers.

The National Heroes Stadium is a new multi-purpose stadium in Lusaka which seats 60 000 spectators.

Conclusion

While it remains most likely that money has been squandered and corruption has been present under Edgar Lungu, he has at least continued building the road to prosperity.

In a recent interview, Amos Chanda, Campaign Spokesman for the Patriotic Front, defended the policies of Edgar Lungu`s government. Asked about the rapid development taking place in and around Lusaka, new roads, bridges, airports and commercial and residential construction, Mr Chanda replied:

“These are the pre-requisites for investment. One thing the government realized when we came in 2011, one thing we realized is that delapedated infrastructure, whether that is roads,water networks, airports, was impacting on development, as it were. That 3 million Zambians were being treated to a power infrastructure, that remained stagnant for 40 years.

So we have had to put 750MW of power because there has been an expansion in industry, mining, so you have got to invest in infrastructure.There has been an expansion in wheat growing, tobacco growing and all those things are powered by energy as the center pivot.

You cannot have a public infrastructure that does not correlate with the population.

There are only 2 ways of raising money, whether at a personal level or a national level or business, it is either debt or equity.If you do not have equity, you have got to go into debt. If that debt is invested into production rather than consumption, there is absolutely nothing wrong.

The government now 2021-2026 is moving into the micro food security,income levels for the people.”

During the same interview Mr Chanda was grilled on the soaring inflation and asked to respond to complaints from residents of Lusaka that they now had very good roads and airports but could not afford food and could not eat roads. His comment was:

“Actually you can eat roads because there was this story of a bumper harvest that all got wasted because no one could get there produce to the markets in good time.”

He is quite right in saying that. More than 90% of the Democratic Republic of Congo has no infrastructure, roads or railways. There everyone says: we want the roads because it is the roads that feed us.

Hard infrastructure is Africa`s primary need. A true friend of Africa are those who build roads and railways.

Whatever the causes of the change in government  may be, I, for one, think the most likely cause for any foreign interfence from Westminster and Washington in Zambia`s elections is that in 2018, the Governor of the Bank of Zambia, Dr Denny Kalyalya, in his `Monetary Policy Committee Statement for fourth quarter 2018`,put forward the proposal to use the Yuan instead of the US dollar as the reserve currency.

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