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Zambia’s new president has settled on a mountain of debt and wealth

Four years ago Hakainde Hichilema was detained at a Zambian prison charged with sedition. He now wants to save the southern African country from economic crisis.

Almost 100 days into his presidency after beating up a prisoner, a former president Edgar Lungu, in a great victory, Hichilema is facing the task of turning the world into a very wealthy but near a financial crisis. The president wants to reduce corruption and increase copper production in order to attract investors and the IMF.

“If you see what I see here, you could fall off your seat,” Hichilema told the Financial Times in London on his return from COP26 climate talks, in reference to what he said was the most common form of government in the past. The wealth we received was nothing.

Last year, Zambia, the second largest producer of copper in Africa, became an African country the world’s first infidelity since the beginning of Covid-19 will jump to pay eurobonds in US dollars.

With the country’s debt of about $ 15bn, plus repayments, the Hichilema government recently announced that the sector would have to repay the loan. Chinese lenders it was $ 6bn, almost double what was previously known. This has raised concerns that there could be hidden and risky loans that could jeopardize negotiations with creditors and the IMF. The new government wants to sign repayment and fund by the end of the year.

Billions of dollars have been stolen as a result of overspending and reimbursement for construction work, as well as fraudulent means of supporting oil and fertilizer, he said – allegations that he instead denies. Hichilema’s government wants to recover stolen goods and reduce the cost of shopping that has previously taken a toll on prices from roads to logs, he said.

Mopani copper mine. Zambia has brought a lot of wealth to the mine from Glencore this year © Anders Pettersson / Getty

Individual creditors want to appear on the loan before negotiating payment; they had previously said they were concerned that anything they could do could be used to pay Chinese lenders.

Hichilema said refusing to negotiate would not be possible after the change of government. Secret agents, he said, “have no choice. You can’t ignore it and wait for an answer especially if your teeth were already in the cows ”, he added of the debtors who were willing to give money to Lungu officials. “You have lent to a country that was poor.”

Debt restructuring talks have already begun with private debtors and China, he said after meeting with eurobond debtors in London. “We will treat debtors appropriately to avoid mergers,” he added, assuring that funds provided by one debtor group could not be used to repay another.

Costs are lower when Lungu officials spent more money to support the August election, which adds to the economic deficit by up to 10 percent of total household spending. Hichilema presented a budget last month that appears to be the basis for the IMF agreement.

The budget seeks to reduce spending by 6.7 percent this year, and ultimately it will be even more so. “This is one of the wise things we need ourselves. We do not want the IMF to tell us to save money,” he said.

One way to solve this problem is to give money to the authorities. “We are taking money from a small band of thieves [the capital] Lusaka is sending it to local areas, ”he said. “Devolution, decentralization has been the subject of debate since independence. No government has dared to do this, but we are doing it. ”

Jimmy Maliseni of the Alliance for Community Action, said he agreed with the country’s policies. “Our concern is as much as it is caused,” he said.

Hichilema, whose victory in August came after five poor presidential elections, was charged with sedition in 2017 after his vehicles overtook a member of the White House en route to a rally. Police in riot gear stormed a rally on Friday, removing hundreds of protesters by truck.

Its economic performance has been reduced by rising copper prices, which have risen to 10 years and recently broke $ 10,000 a tonne. The government is looking at GDP growth of 3.5 percent in 2021 after falling nearly 3 percent in 2020.

Hichilema has refused to apply for a mining tax. The main target of about four times a year increase from the current 880,000 tonnes depends on investors to ensure that Zambia is a safe and secure place to do business, he said.

But Hichilema is under pressure to raise more money from the agency and to open up greater opportunities for the people of Zambia, said Trevor Simumba, an economist.

“The government should also emphasize the [mining groups] that he should give more, especially with the copper price where it is. “Mining is making only a small profit, and it will be fair for Zambia to benefit,” said Simumba.

Despite having a history and past leadership, Hichilema has said he will not pursue a vendetta. “We want to restore the rule of law. But we do not want to continue the evil behavior of our past, ”he said. “We do not want revenge.”

This does not mean that the people of Lungu’s government, including the former president, could not be prosecuted, Hichilema said.

“We must not offend this without punishment. We do not tolerate corruption,” he said.

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