Zambia – The patience of the cobra

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Zambia has seen its shares of ups and down. Considered one of Africa’s richest countries at independence, it became one of the poorest in just a few years. The nationalization of the mining sector, mismanagement of mining and agriculture, lower copper prices on the international market and a soaring national debt, did the trick. By the time Kenneth Kaunda, founding father and sole president of the country since independence, lost power, Zambia was at the mercy of international markets. Since then, the Movement for Multiparty Democracy (MMD) has held power and embarked in a program of economic reform. Somehow, the program worked. Foreign aid, debt relief, improved support to the agricultural sector and a new mining frenzy helped to boost the recent recovery. The economy has grown by an annual average of some 5.6% for the past five years and will exceed 7% in 2011. Zambia is now out of shallow water, but the majority of the people are still to enjoy the new prosperity. Around two-thirds of them still live on less than $2 a day.

This factor proved crucial last September, when Zambians went to cast their vote in a general election. After two days of counting, Chief Justice Ernest Sakala declared Michael Sata of the Patriotic Front (PF) the new President of Zambia. Electoral Commission of Zambia chairperson Ireen Mambilima said Mr Sata received 1,150,045 votes, almost 200,000 more than his closest rival, incumbent President Banda.

Sata lived in the UK as a youngster, where he used to work as a porter and cleaner at Victoria Station in London. Once back in Zambia, Sata was a minister in Kenneth Kaunda’s United National Independence Party, until he fell out with the president and joined the MMD, holding various portfolios under President Frederick Chiluba. After a bitter dispute with the latter, he set up his own party in 2001. He ran for the presidency four times, always defeated by MMD candidates for just a fistful of votes. Sata is called “King Cobra” by his suoporters for his poisonous tongue. During the latest campaign, he slashed at foreign mining firms – mainly from China – for the labour conditions they impose, and which he did compare to modern slavery. He also promised less taxes, more jobs and better education. This made him popular among workers, especially in the mining districts north of Lusaka, where he gathered most of his support.
Sata’s election is making investors nervous, especially the Chinese. Chinese companies have bought a number of copper, cobalt and nickel mines, which had been abandoned by investors when commodity prices fell. There is also growing Chinese presence in the retail sector, from imported textiles and electronics, to chickens grown locally and sold in city markets. Zambia is also home to two of China’s six African Special Economic Zones, where special regulations and tax incentives attract foreign companies. The Bank of China is present in the country and trades also in yuan. “As a bank, we make money through transactions where you change currencies, but we think it is in the best interests of our clients and trade that we remove this additional layer and currency and make it more convenient for our clients,” Qi Wang, the bank’s assistant general manager, said. Sino-Zambian trade reached $2.8bn last year. One can excuse the Chinese for being nervous. However, also Sata will have to be more careful in his outburst. After all, without Chinese investor the country could simply deflate and lose all gained ground.

With the two main presidential candidates in their mid 70s, it is expected it will be their last election, which makes the stakes even higher.
Although the country has little history of political violence – apart from street riots in the final months of independence leader Kenneth Kaunda’s rule, when the economy had collapsed – there are some concerns that the closeness of the race this year could raise tensions.

While China and its role in the country has been less of an issue during this campaign compared with previous years, the Chinese investors are likely to watch very closely who emerges victorious when the results are announced on Friday.


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