The Brief No. 32
20 August 2022
The swearing in of Hakainde Hichilema, a successful businessman and the leader of the United Party for National Development (UPND) on 24 August 2021 brought an element of hope to many Zambians. Hichilema managed to garner over 2.8 million votes to that of his political rival, former President of Zambia and a leader of the Patriotic Front (PF), Edgar Chagwa Lungu.
Hichilema’s immediate task, amongst others, was to fix the ailing economy.
Zambia halted $17billion of external debt during the pandemic in 2020. It was therefore the first country to default in Africa. China has granted an estimated $65billions in loans to the country making it the largest creditor in Zambia. The country has used that money to build ambitious infrastructure including the new airport in its capital, Lusaka.
“Chinese debt trap” is perhaps one matter Zambians should be concerned about, particularly following what happened in Sri Lanka. After Sri Lanka failed to pay Chinese debt, key infrastructure including the control of its port were remanded to China.
Hichilema has started the strenuous process of debt restructuring with the IMF. According to the Financial Times (FT) “President Hichilema’s government agreed terms for a three-year IMF bailout within months of coming to power”. This could be perhaps the only way out from China Debt trap which could see the country losing control of its key national assets and infrastructure to China.
Politics might be changing in Zambia however there seems to be tough economic times ahead, a great test for the presidential tenure of President Hichilema.
Afrasid is available for analysis and commentary.