‘You ain’t seen nothing yet’ - Oxford Professor Praises Future of Zambia’s Economy

Oxford University Professor of Economics and Public Policy Paul Collier has praised President Hakainde Hichilema’s record in government, arguing that he inherited a difficult position and has now positioned the country for future economic growth. 

Speaking to Zambia Is Back’s ‘BackChat’ program, Professor Collier said, “The change that President Hichilema will achieve in a second term will set a role model for the rest of southern Africa. Reforms will extend beyond minerals - to agriculture and new businesses.”

The British Academic explained that Zambia’s economic history demonstrates the urgent need for President Hichilema’s reforming agenda. Citing Chile as an example of a fellow copper exporter, “neck and neck” with Zambia 50 years ago, Collier highlights the different trajectories of the two nations - Chile’s GDP Per Capita is now over 15 times Zambia’s. 

Professor Collier attributes the two countries’ divergent economic fortunes to poor management under a corrupt political class in Lusaka, where political power alternated between the two largest ethnic-based parties. Meanwhile, he says, mining and agriculture were underdeveloped. 

Professor Collier said he was particularly impressed by President Hichilema’s commitment to political devolution, saying it “woke me up” to Hichilema when he was still an opposition candidate. The President’s National Decentralization Policy and Zambia Devolution Support Program (ZDSP), launched in May of last year, has now kicked off what Collier calls ‘long overdue’ decentralisation. 

The move to devolution signalled the government’s commitment to bringing government services closer to the people and promoting accountability and transparency among local authorities and regions. Ultimately, the aim was to reduce corruption and boost international investment.

President Hichilema greets the local community in Zambezi District, NW Province

Asked if he thought the country was in a stronger position now than under the previous government, Collier responded that whilst Zambia is still in a difficult position, it is “through no fault of President Hichilema.” 

The ongoing droughts are a major setback for Zambia, just as the government nears the end of a slow and painful debt-restructuring process after it became Africa’s first pandemic-era sovereign defaulter in 2020. This “double whammy”, as Collier terms it, has made life very difficult for Zambians. Staple corn harvests fell by 54% to a 16-year low, while hydropower generation -  which accounts for about 85% of Zambia’s electricity supply- has plunged, leading to rolling blackouts lasting at least 12 hours daily. 

Collier contends that the situation would be a lot worse if President Hichilema were not in power. Regarding Hichilema’s ability to secure international support, Collier said, “It’s the very top of international agencies, the very top of America and the very top of Britain, which shows the level of authority and respect that President Hichilema commands in international circles”. President Hichilema has also taken significant action to tackle the energy crisis, accelerating private investment in new energy, expanding the use of solar panels, and increasing the grid supply through new energy providers. 

President Hichilema has expanded the use of solar panel within Zambia to help tackle the current energy crisis. 

There are significant signs that Zambia is tempting investment back in. In 2023, the Zambia Development Agency (ZDA) reported pledged investments totalling US$39.97 billion, a significant increase from US$8.11 billion in 2022 and US$3.3 billion in 2021. The number of committed jobs also rose sharply from 24,585 in 2021 to 160,280 in 2023. 

Last week, Moody’s Ratings upgraded Zambia’s long-term foreign-currency issuer rating to Caa2 from Ca, which is a step in the right direction. Hichilema’s government’s strong performance under its IMF program “anchors the agency’s expectations of continuing gradual institutional improvement,”said Moody’s. 

Looking ahead, Professor Collier believes there are two keys to growth and economic development and that President Hichilema’s business acumen and economic reforms are essential to both.

The first key is finding venture capital to catalyse new businesses and sectors; in Collier's words, “It’s not pick a sector, it's pick a process”. The process of experimentation, with risk finance investing in small firms led by young Zambian entrepreneurs, is essential to diversifying the economy and expanding Zambia’s middle class. 

The formulation of a new startup bill and community-allocated Constituency Development Funds (CDF) show that Zambia is setting the stage for redefining its economy, focusing on innovation and entrepreneurship, and making capital access easier.

The second key to development according to Collier, is a “gradual struggle to win the battle for productivity across the economy.” In particular, the development expert believes that mining on the Copperbelt, agriculture and Small and Medium-sized Enterprises (SMEs) can all flourish and become more productive in Zambia. “This is the way to make sustainable improvements,” he argues. 

Professor Collier says agriculture is e key to developing Zambia's economy

All in all, Professor Collier firmly believes that President Hichilema is in a position to win the next election and that by the end of the extra seven years, “people in Zambia will be materially more prosperous because they will be more productive.”

You can watch the full interview with Professor Collier on the latest episode of BackChat.