At his inauguration one year ago this week, Zambia’s president Hakainde Hichilema inherited a country with a heavily indebted economy and a reputation for fiscal unreliability.
He has secured, for now at least, Zambian citizens’ buy-in and patience for what he is seeking to do – with future debt-repayment austerity lurking on the horizon.
Hichilema’s predecessor Edgar Lungu consistently harassed – and some would say persecuted – Hichilema, casting him in the role of a perpetual loser who was destined never to win the presidency with five failed previous efforts.
At the same time, Lungu embarked on an ambitious but recklessly-financed programme of both prestige and infrastructural projects, relying greatly on foreign liquidity particularly from China, and on commercial borrowings by way of the issue of Eurobonds – upon which his administration defaulted.
Hichilema has seemingly managed to mitigate the leverage the Chinese had over the Zambian economy and has been strategic in both developing independence in movement and in building a range of alliances to offset dependence on one power alone.
In doing so, he has displayed regional leadership – demonstrating the merits of ‘positive neutrality’ in pursuing policies that run across global geopolitical divides for the benefit of the national interest.
Adopting a clinical style
Hichilema has ushered in a new style which is not only distinct from his predecessor but also sets him apart from other regional leaders. He took a very lean delegation to Glasgow’s COP26 climate conference which stood in marked contrast to the usual bloated Zimbabwean delegation which was ineffective in its outreach.
Hichilema’s track record through successive elections had been one of advocating green energy and he played this record well. His assiduous work and bridge-building brought discernible respect for this ‘new man’ in Zambia.
At the Commonwealth summit in Kigali, Hichilema was again conspicuous by his serious demeanour and he followed up his courting of the Commonwealth by facilitating an honour for its Secretary-General, Baroness Scotland, who became Headwoman of the Lundwe people of Bweengwa area in Monze.
But it was the United Nations (UN) vote against the Russian invasion of Ukraine that saw Zambia break ranks with its neighbours Zimbabwe and South Africa which abstained from condemning the invasion. Zambia’s signing of the resolution alerted the US that in the heart of Africa was an unlooked-for but potentially valuable ally.
A US Office of Security Cooperation was established in Zambia at the end of April, alarming both the Zimbabwean government and South Africa’s Julius Malema, president of the Economic Freedom Fighters party.
No tangible military cooperation seems thus far to have happened but it seems to have prompted China to take steps to have Zambia ‘onside’. It could not do so militarily but, as so much debt was owed to China, it could do so economically.
Resetting the Chinese relationship
China saw the prospective pivotal nature of Zambia in the region and, as well as seeking to safeguard as much as possible of its investment there, also sought to at least equal any prospective US foreign policy impact on the country.
Hichilema has been wise in courting this approach. In April a new Chinese Chamber of Commerce in Zambia was launched in Lusaka and, on 31 May, President Xi conducted a personal phone call with Hichilema, promising a sympathetic Chinese approach to Zambia’s debt.
In the meantime, Situmbeko Musokotwane – Zambia’s energetic but also measured and experienced finance minister – had begun serious discussions with the International monetary Fund (IMF) about a debt-relief package.
It took some time for the Hichilema government to ascertain the size of the debt built up by Lungu but it turned out to be some $31 billion, well over 115 per cent of GDP. Some $17 billion was external debt, about one-third of which was owed to China.
The IMF, on conditions of suitable reforms, agreed to a credit facility on the condition of Zambia reaching agreements with its creditors. Debt restructuring has made significant progress under the G20 Common Framework – in which all creditors, including China as co-chair – have to express common agreement on the way forward.
Many were reluctant but clearly if China could be persuaded to come to agreement others would be effectively towed in its wake. The process could set an important precedent not just for the region but for other heavily indebted emerging economies globally. Hichilema’s assertive stance on China has been grateful for its support and acknowledges its importance to Zambia but has not shied away from being critical and questioning when needed.
The agreement between Zambia and Tanzania to refurbish the Tazara rail link using standard gauge tracks for easier vehicle use credits some of the line’s failures to the original Chinese track design. But almost immediately afterwards, Hichilema was unveiling the memorial park for the Chinese workers who had died in the construction of Tazara, seen as symbolic and meaningful by the Chinese ambassador.
The agreement over Tazara with Tanzania also spoke to a regional emphasis in Zambia’s external relations and was pointed out in its photo opportunities for Hichilema with a female Islamic president.
China was also given full credit at the opening of the Kafue Gorge Lower Power Station at an August ceremony – it will come on tap in November. Although work began under a much earlier administration, Hichilema shepherded it through its final stages and the new facility will mean Zambia continues to produce more than 80 per cent of its energy through renewable hydro stations and reinforces Hichilema’s ‘green’ credentials.
Regional opportunities key for Zambia
Hichilema has prioritized economic diplomacy, seeking private sector investment and thus shifting the emphasis of Zambian foreign policy into the commercial realm, and he refers to himself as the chief marketing officer.