‘Calculator Boy’ Hichilema Revives Zambia’s Fortunes After Chinese Debt Disaster
The Times, September 8, 2023
Not that long ago Chinese credit was easy to get in Zambia. A government department could contact a Beijing lender directly without needing to get it signed off by finance ministers.
Millions of dollars were squandered or used to line pockets. Ministers campaigned in helicopters and the president had a Gulfstream jet. All the while the debts were racking up. It could not last.
“We have lost an obscene amount of money on corruption — money that could have been used to feed, house, clothe and educate our children,” said Hakainde Hichilema, a man once mocked as “calculator boy” for his head for dry numbers.
A year after securing the presidency — at his sixth attempt — in a landslide, Hichilema is unpicking the ruinous rule of his predecessor, Edgar Lungu, who threatened to turn Zambia into the new Zimbabwe.
Under Lungu’s administration, international debt quadrupled to more than 120 per cent of Zambia’s GDP. He failed to negotiate a lifeline from the International Monetary Fund (IMF) after it became the first African state to default since the 2005 agreement to wipe clean the debts of 30 of the continent’s poorest states.
The $1.3 billion IMF bailout secured by Hichilema’s government last week was seen as a huge vote of confidence in his commitment to restraint and reform. A successful exit from default could make Zambia a model for other states in Africa, where China is the biggest lender and the threat of debt distress is high. China has overtaken the World Bank as the biggest foreign creditor to developing countries.
The crisis has revived accusations, led by Washington, that Beijing is using “debt trap diplomacy” to hobble borrowers with unsustainable debts and then grab assets.
Zambia’s debt of $6 billion to 18 different lenders was twice previous estimates. But speaking to The Times, Hichilema, 60, denied that Beijing had an appetite for opacity. He described China as his country’s “all-weather friends”.
New laws on transparency and a cap on future borrowing will keep things honest, he said. “The only change we can probably say is that we have just raised the bar in terms of engagement.”
In the year since Hichilema took power, its currency, the kwacha, has become one of the world’s best performers against the dollar, having long been the worst. Inflation has bucked the regional trend, dropping to single digits, while neighbouring states have seen fuel and food prices surge.
One of the country’s richest men in his own right, Hichilema studied economics locally and for an MBA in Britain before building a business empire. Describing himself as a “volunteer president”, he does not need the salary.
• China debt ‘could bury poorest’
Though content that colleagues should draw their salaries, he would prefer more austerity as the country’s population of 13 million continues to suffer. A video of Hichilema rebuking local government officials for their taste in fancy cars lit up social media.
“I have to remind them they are there to serve and not be served,” he said. “There is no need to have top-of-the-range vehicles when your own constituents are going to bed hungry.”
After enduring beatings and dozens of arrests during his five failed runs for office, Hichilema insists that he has no appetite for vindictiveness. A pledge to recover what was looted has led to assets worth millions of dollars, including helicopters and property, being seized from Lungu, his family and former ministers. The proceeds have been used to fund more than 2,000 scholarships at the University of Zambia.
Though momentous, the IMF bailout will not bring quick relief to Zambians, 58 per cent of whom earn less than $1.90 per day; across sub-Saharan Africa it is 41 per cent.
“We cannot afford to be populists. We have to reform, reform, reform,” Hichilema said, firmly advising those without jobs to create work for themselves and not expect handouts. “There is nothing more satisfying and gratifying than earning your money in an honest manner and sleeping peacefully at night.”
• The Times view on Hakainde Hichilema’s election: Zambian Democracy
The free-for-all climate that marked life under the old guard is slowly lifting, according to Laura Miti, the head of a Zambian NGO focused on public accountability. “We’ve gone a year without a major corruption scandal,” she said. “There used to be one a week.”
Beyond the economy, she would like to see Hichilema promote some women to his cabinet, take a less conservative approach on social issues and urgently prioritise reform of laws that Zambia’s governments have consistently used to suppress free speech.
“It would not have taken much to improve things after Lungu,” Miti said. “We were at rock bottom. Hichilema has got a great deal more to do but it does at least feel like there’s an adult in the room.”
Image: TSVANGIRAYI MUKWAZHI/AP TO