Zambia: Two Years On for Sata – the Success Story and Its Dark Side

As the Patriotic Front celebrates two years in power, Sata’s story of economic growth is undermined by one of political repression.

Economic development or autocratic regression? After two years in government, Zambia’s Patriotic Front (PF) has inspired a double narrative. One side of the story features uncapped leadership ambitions, violent street politics, broken promises and a repressed opposition.

The other side shows a blooming economy, with an expanding GDP, increased foreign direct investment, thousands of new jobs and much-needed sector diversification. Both are true.

Unsurprisingly, it was the platinum version which President Michael Sata underlined on September 20 during a speech to inaugurate the 11th National Assembly’s third session, rattling off a by now familiar set of economic indicators. Zambia registered GDP growth of 7.3% in 2012, though it is down to 6% for 2013 thanks to lowered agricultural production.

Inflation shrunk to 7% over the summer of 2013. Lending rates have fallen to 16%, down from 20% last year. Furthermore, by the end of June, the government had surpassed its $3 billion foreign direct investment target for the year by over half a billion dollars.

The centrepiece of Sata’s economic record remains the $750 million Eurobond issued last September, a move straight out of Zambian author Dambisa Moyo’s 2009 book Dead Aid. With that first foray into international capital markets, Zambia joined a growing cohort of sub-Saharan African countries drifting away from the concessional loans and aid-based development doctrine promoted by the World Bank and International Monetary Fund.

The Eurobond money is earmarked for energy generation and transmission, road and rail infrastructure, small and medium enterprise development, and health care. Of course, this comes with voices of caution that remember Zambia’s recent history as a Heavily Indebted Poor Country (HIPC).

The Treasury says that, in 2013, debt will reach 37% of GDP – not perfect, but much better compared to 200% at the peak of its debt crisis twenty years ago – and that figure is expected to come down when the government rebases GDP next month.

Meanwhile, Zambia has received a frenzy of international attention for co-hosting the United Nations World Tourism Organisation’s General Assembly with Zimbabwe. It is generally agreed that the conference will contribute to a long-term branding success, although the private sector had mixed feelings about the event, with operators in the host city of Livingstone lamenting the absence of immediate economic benefits.

Tourism is central in PF’s economic diversification agenda, along with agricultural development, infrastructure construction and manufacturing, all of which factored in the party’s 2011 campaign.

Paving the way to school

To that end, Sata boasted of a 316,000 multi-sector expansion in jobs in his speech. While light on specifics, the government has been open about setting targets, promising 510,000 jobs in agriculture and 500,000 in tourism alone.

A series of road work programmes also features in the government’s job-creation scheme, with Pave Zambia 2000 pledging 20,000 jobs, Link Zambia 8000 gearing up for its second phase paving 2,700 kilometres of inter-district highways, and Lusaka 400 targeting roads in the nation’s capital.

The party’s 2011 manifesto also vowed huge changes in the health and education sectors, which, thanks in large part to Zambia’s painful history of debt servicing obligations, have been long neglected. The document criticised the former Movement for Multiparty Democracy (MMD) government for funding only 18% of the education sector, forcing it to rely on non-governmental support.

Sata’s anniversary speech highlighted an on-going review of education policy with the intention of aligning curricula to national development goals.

He said the government would speed up the construction of secondary schools, with 32 of 84 completed to date. University construction is also on-going and the 2013 budget pledged 17.5% of total expenditure to education.

The administration has also increased health expenditure. Its manifesto disparaged MMD allocations of 6% (although the former government actually pegged its contributions at 8.6% in 2011).

In 2013, budget allocations were just over 11%. Health achievements this year have been partly smothered by on-going news of anti-retroviral shortages – or “rationing”, in official parlance – but Sata boasted a battery of progress indicators, including 137 facility upgrades, two new district hospitals and hundreds of sector-related construction projects.

A sinister side

In general, the numbers paint a reliable picture of a developing county. The fact of the Eurobond’s relatively low coupon rate and 15 times oversubscribed alone attest to market confidence in Zambia. But there is a sinister side to the Sata administration, which seems to be intensifying.

To start with, rumours of the president’s poor health sparked a leadership rivalry between Defence Minister Geoffrey Mwamba and the party’s Secretary General and Justice Minister Wynter Kabimba.

While each minister has since publicly distanced himself from presidential ambitions, the dispute was intense enough to split the PF into factions, with six members arrested by police after allegedly storming a party function, destroying property and beating attendants.

PF-perpetrated violence has been directed outwards as well. The most recent case was against Hakainde Hichilema, leader of the country’s third-place opposition United Party for National Development, who says his entourage was attacked last week during a visit to the town of Kasama. While the incident was reported in numerous media outlets, the police issued a statement on Friday refuting Hichilema’s version of events.

Violence has also been a feature of Zambia’s numerous by-elections, the result of a PF strategy to increase their majority in Parliament. Government baits the opposition parliamentarians with ministerial appointments and other incentives, triggering by-elections whenever members cross the legislature. The tactic has been largely successful, with PF winning eight of 13 ballots so far, with three more soon.

But after the recent vote in Mkaika, which the MMD won by a landslide, newspaper reports alleged PF-orchestrated violence, complete with gruesome photographs depicting bloodied members of the opposition. Victims of political violence come from all parties, however, as shown by the 2012 Rufunsa local government by-election that ended in the murder of a PF cadre.

The trend in the ruling party has been severe enough to merit censure from The Post, the country’s leading independent and pro-government newspaper.

In an editorial earlier this month, the paper called on government to weed out and punish party thugs involved in street violence. Sata has spoken out against electoral bloodshed, but his personal record on the issue is dubious. Nicknamed King Cobra, he was linked to machete attacks in a 2001 by-election while serving as minister without portfolio in the late Fredrick Chiluba’s MMD government.

Cultivating a culture of silence

Sata has also taken up Africa’s presidential tradition of wielding the same laws that frustrated him in opposition. He has been accused of silencing critics with criminal and civil defamation proceedings, with members of the opposition-aligned media a favourite target. PF cadres have also been accused of beating journalists and a series of institutional media reforms have run aground, due to the government’s powers to make key appointments to relevant committees.

Critics also say the government’s use of the colonial Public Order Act has impinged on constitutionally guaranteed rights of assembly. While the law calls only for organisers to inform police of demonstrations, in practice it has been used to shut them down entirely.

This tendency to suppress alternative dialogue also plays out in disputes with Zambia’s NGOs, many of which are threatening to boycott what they say is an onerous registration process if government does not amend an MMD-era law setting out the terms of their operation. The government says groups that do not register will be delegitimised.

Broken promises

Despite the appearance that Sata has delivered on many of the country’s economic indicators, he trails a long string of broken promises. One of the most significant of these is his government’s on-going failure to introduce a new constitution, which it promised to do within 90 days of taking power.

Another of the government’s 90-day pledges vowed to peacefully settle long-standing separatist sentiments in Western Province, but clashes have continued, culminating in over 60 arrests and numerous treason charges last month. Likewise, the Freedom of Information Bill, paralysed since before his administration took office, has yet to come before the National Assembly, despite assurances to the contrary.

Not all stakeholders are internal. Dominated by foreign ownership, the extraction industry anxiously awaits the completion of government’s review of the Mining Act, and, according to a piece in this month’s The Bulletin and Record, it is unsure of what to expect.

That makes for an uncertain investment environment in a country that relies on mining for 80% of its export receipts and, despite weaker Chinese demand, expects copper tonnage to reach 1.5 million tonnes by 2015. No matter what the review reveals, it is not likely to assuage the industry’s legion of critics, who say generations of mining development have failed to improve the economic prospects of ordinary Zambians.

The story of the PF in power is convoluted and often ambiguous. The Sata administration reinstated the Anti-Corruption Act abuse of office clause, but the president appointed his uncle as minister of finance. The government stabilised the kwacha, but it tore fuel and maize subsidies away from the poor.

Zambia has the respect of international markets, but it maintains close ties with North Korea. The first big vote of the new session will be the 2014 budget, a document that will inevitably steer the narrative toward the 2016 election. The 2011 poll was close. If the government doesn’t live up to its promises, the next one may be too.

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