ZAMBIA’S elections in 2021 are expected to be neither free nor fair, with blatant populism likely emerging, states the Economist Intelligence Unit.
The EIU has also forecast that Zambia’s current austerity programme will ultimately founder on China’s insistence that projects that it is financing proceed as planned.
The EIU predicts that Zambia will face substantial threats to underlying political stability in 2019-23 and simmering popular frustration over economic and political grievances could quickly turn violent.
In its latest outlook on Zambia’s political stability for 2019-23, the EIU predicts that the ruling Patriotic Front, led by President Edgar Lungu, is expected to retain power in elections scheduled for August 2021.
“The run-up to the 2021 legislative and presidential elections will be an especially unstable period, during which a vulnerable government will narrow the political space aggressively and escalate crackdowns,” the report states.
“Another layer of potential risk emanates from the burgeoning influence of China in Zambia’s affairs, with growing popular suspicion that to get debt relief, the government plans to sell key state assets to China.”
The EIU further states that in May: “a temporary body known as the National Dialogue Forum (NDF) finished its work adopting draft bills to amend the constitution and pre-existing legislation. A series of controversial bills are now being debated in Parliament, such as the Constitution Amendment Bill (which, among other provisions, would abolish parliamentary oversight over contracting public debt and allow the presidency to enter into international agreements or treaties without the approval of the National Assembly). Despite opposition parties alleging that such changes to the Constitution are biased in favour of the PF, the NDF’s recommendations will be passed under a parliament in which the government commands a comfortable majority of legislators. This will undermine political stability by feeding into public fears that Zambia is undergoing a democratic recession.”
The report further states that as public distrust of the government grows, protests could turn violent and, if disorder becomes widespread, extra security powers could come into force, as happened in 2017.
“On the one hand, this would bolster overall stability; on the other, it would reinforce perceptions that Zambia is staggering towards autocracy and exacerbate underlying social tensions,” the report states.
The EIU states that by the time of the general elections in 2021, the possibility of Zambia being caught in a debt trap – characterised by a loss of economic sovereignty to creditors – will be a key concern among voters (the issue has caused riots in the recent past).
“Because of high debt-servicing costs, fiscal space will also have been tightened, causing salaries to be frozen and subsidies cut. The Economist Intelligence Unit therefore expects the elections to be neither free nor fair, with blatant populism likely emerging,” the report states.
It adds that “one early sign was a highly controversial state intervention to liquidate a private, foreign-owned mine (resource nationalisation being a classic local vote-winner)”, in reference to Konkola Copper Mines.
The EIU states that the United Party for National Development (UPND), together with a new generation of opposition parties, will have to surmount the challenge of an uneven playing field.
“The UPND’s candidate (likely to be its current leader, Hakainde Hichilema) will be a formidable threat to Mr Lungu in the presidential election, but the party has lost its way since the 2016 election,” it states. “With the government likely to make maximum use of incumbency advantages, our baseline forecast is for Mr Lungu to win in 2021.”
On international relations, the EIU states that Zambia’s relations with Western donors and multilateral financial institutions would continue to deteriorate in light of the government’s anti-democratic domestic reforms and unorthodox macroeconomic policies.
“Spurned by the West, Zambia will continue to deepen its dependency on its main bilateral creditor, China, from which the government has borrowed excessively over recent years. In exchange, Chinese state-owned lenders will probably agree to debt restructuring, preventing a sovereign default,” states the report.
“However, the restructuring will be on the proviso that Zambia borrows more (albeit at a lower rate) for a string of Chinese-contracted infrastructure projects, and potentially allows debt-for-equity swaps on state-owned enterprises. This will provide some financial relief in the short term, but compromise relations with Western donors and investors (many of whom regard an IMF package as indispensable), and jeopardise long-term debt sustainability. We forecast that Zambia’s current austerity programme will ultimately founder, on China’s insistence that projects that it is financing proceed as planned.”