Zambia

Politics:

• Analysis

  Zambia politics: Quick View - Parliament strips former president of his imm

  Event

  Parliament has lifted the immunity from prosecution enjoyed by the former president, Rupiah Banda, paving the way for Mr Banda to be tried on charges of corruption.

  Analysis

  The motion scraped through parliament with a minimum of required votes-80 of the country's 158 MPs voted in favour of it. Two MPs voted against it and three abstained, while the rest walked out of parliament asserting that the vote was illegal. Their claim hinged on a technicality-Mr Banda had filed a case at the High Court requesting an injunction against the motion, and the main opposition parties asserted that the case had to be heard before the motion could be debated in parliament.

  The parliamentary vote has paved the way for Mr Banda to be prosecuted for corruption. The government accuses him of misappropriating over US$11m in public funds, abusing state funds while campaigning for the 2011 elections and acquiring property illicitly. Mr Banda has denied these allegations and accused the ruling party of engaging in a political witch hunt-a charge that is likely to resonate given the government's recent harassment of the opposition.

  Even if Mr Banda is guilty, the likelihood of a successful prosecution is somewhat low as court cases tend to be long drawn out affairs and changes in the political landscape can influence their outcome. The case of another former president, Frederick Chiluba, is illuminating in this respect. In 2002 parliament lifted Mr Chiluba's immunity via a unanimous vote (barring abstentions), allowing him to be prosecuted for corruption. The cases against Mr Chiluba, however, dragged on for a number of years and then fizzled out following a series of controversial judicial decisions that were made after Mr Banda (with whom Mr Chiluba seemed to enjoy a close relationship) came to power in 2008. Notable among these was a ruling by the Lusaka High Court that a 2007 verdict by a London court, which had found Mr Chiluba and his allies guilty of misappropriating US$46m from the public coffers, could not be enforced in Zambia.

  Even if Mr Banda were prosecuted successfully, this would not necessarily deter Zambia's current and future leaders from engaging in abuses of office. Measures to strengthen the power and independence of bodies responsible for scrutinising public spending would be far more effective in this respect. In fact, a successful prosecution could have the perverse effect of making future leaders less willing to surrender power in the event of a defeat at the polls.

  March 19, 2013

• Background

  Zambia: Key figures

  Levy Mwanawasa

  Mr Mwanawasa has asserted his presidency by focusing on the fight against corruption and on prudent economic management. However, after suffering a major stroke in June 2008, his ill health is now dominating the political scene and he is unlikely to be able to complete his second term in office.

  Rupiah Banda

  Mr Banda is the vice-president and so holds the reins of power while Mr Mwanawasa is incapacitated. Although he has been a unifying personality within the Movement for Multiparty Democracy (MMD), his advanced age means that he is not a long-term solution to the party's leadership dilemma.

  Ng'andu Magande

  The finance minister is a popular figure after playing a major role in bringing about macroeconomic stability in Zambia. Mr Magande normally keeps a low profile in public life and his strict handling of public finances has distanced him from fellow ministers. Nevertheless, he is probably the favourite to succeed Mr Mwanawasa.

  Katele Kalumba

  Despite accusations of corruption levelled against him, Mr Kalumba remains a major political force and is another possible successor to Mr Mwanawasa. As MMD national secretary, he commands respect among the grassroots supporters.

  Michael Sata

  The outspoken politician is the most popular opposition leader in the country, largely because of his pro-poor populist policies. Mr Sata is a strong contender to become the next president but would be constrained by his own ill health after suffering a heart attack in the first half of 2008.

  Hakainde Hichilema

  The Lusaka businessman has emerged to become a respected political player within a short period of time after he was elected leader of the United Party for National Development in mid-2006. He represents the next generation of Zambian politicians and is a possible future president.

  Frederick Chiluba

  The former president, who ruled the country from 1991 to 2001, has seen his influence eroded by the ruling made against him in the British courts on corruption charges in 2007. Nevertheless, he remains popular domestically—especially among some of the influential Bemba ethnic group—and is unlikely to disappear from the political scene.

  The judiciary

  Despite some questionable judgments in high-profile political cases, the judiciary has managed to preserve its independence from the executive and legislature. Nevertheless, the strength and independence of the justice system has been seriously tested by the corruption trial of Mr Chiluba. There are doubts that the judicial system can properly handle the substantial, politically sensitive case.

  The legislature

  The 1996 constitution strengthened the formal powers of the unicameral legislature, the 158-seat National Assembly. However, MMD parliamentarians have rarely challenged their government, with the notable exception of their opposition to Mr Chiluba's third-term bid.

  Media services

  Zambia has one state-owned television and radio station, run by the Zambia National Broadcasting Corporation (ZNBC). A privately owned television station, Muvi TV, was given an operating licence in 2004 and has emerged as a serious competitor to the ZNBC, which had previously enjoyed a monopoly on domestic television broadcasting. There has been a boom in private radio stations following the liberalisation of airwaves in 2002, but few operate outside Lusaka. There are, instead, numerous community radio stations that operate in rural regions. The Zambia Daily Mail and the Times of Zambia are state-owned newspapers with consistently pro-government content. Independent newspapers periodically fight off government attempts to rein them in, often in the form of libel actions. The Post is Zambia's main independent newspaper, with a reputation for being strongly critical of the government. Nevertheless, all newspapers service a relatively small readership in an environment where not many people have the money to buy them.

  Democracy index (for methodology, see Appendix)

  The Economist Intelligence Unit's 2008 democracy index ranks Zambia 97th out of 167 countries, putting it among the countries considered "hybrid regimes". This designation includes neighbouring states such as Tanzania, Malawi and Mozambique, but Zambia ranks behind other neighbours like Namibia and Botswana. South Africa, ranked in 31st place, is a long way ahead in terms of its democracy. Zambia scores relatively well in the categories of political culture and civil liberties, reflecting the strong support from the population for the role of democracy, the relatively free press, and a strong freedom of expression. However, although there is a strong belief in democracy, Zambia scores poorly in terms of political participation, with voters often too busy scraping together a living to be able to participate fully.

  Democracy Index
  	Overall score	Overall rank	Electoral process	Government functioning	Political participation	Political culture	Civil liberties	Regime type
  Zambia	5.25	97	5.25	4.64	3.33	6.25	6.76	Hybrid regime
  Overall and component scores are on a scale of 0 to 10; overall rank is out of 167 countries.

  Download text file (csv format)

  July 31, 2008

• Structure

  Zambia: Political structure

  Official name

  Republic of Zambia

  Form of state

  Unitary republic

  Legal system

  Based on the 1996 constitution

  National legislature

  National Assembly; 150 members elected by universal suffrage, serving a five-year term; the president can appoint eight further members

  National elections

  Last presidential and legislative elections held on September 20th 2011; next presidential and legislative elections due in September 2016

  Head of state

  President, elected by universal suffrage for a term of five years

  National government

  The president and his appointed cabinet

  Main political parties

  The Patriotic Front (PF) is the ruling party and holds the largest number of seats in parliament; the Movement for Multiparty Democracy (MMD) is the largest opposition party; no single party holds a parliamentary majority; the other parties in the National Assembly are the United Party for National Development (UPND), the Forum for Democracy and Development (FDD), and the Alliance for Democracy and Development (ADD)

  President: Michael Sata

  Vice-president: Guy Scott

  Key ministers

  Agriculture & livestock: Robert Sichinga

  Chiefs & traditional affairs: Nkanda Luo

  Commerce, trade & industry: Emmanuel Chenda

  Community development, mother & child health: Joseph Katema

  Defence: Geoffrey Mwamba

  Education, science & vocational training: John Phiri

  Finance & national planning: Alexander Chikwanda

  Foreign affairs & tourism: Effron Lungu

  Health: Joseph Kasonde

  Home affairs: Edward C Lungu

  Information & broadcasting: Kennedy Sakeni

  Justice: Wynter Kabimba

  Lands, natural resources & environmental protection: Wilbur Simuusa

  Local government & housing: Emmerine Kabanshi

  Mines, energy & water development: Yamfwa Mukanga

  Transport, works, supply & communications: Christopher Yaluma

  Youth & sports: Chishimba Kambwili

  Central bank governor

  Michael Gondwe

  March 07, 2013

• Outlook

  Zambia: Key developments

  Outlook for 2013-17

  • The president, Michael Sata, and his party, the Patriotic Front (PF), will remain in power at least until the next elections in 2016.
  • Political stability will be maintained, but this will be marred by sporadic unrest as the government continues to antagonise the opposition and voters remain dissatisfied with its slow progress in meeting its campaign promises.
  • The government will focus on boosting mining revenue, supporting local investment and lowering unemployment. However, it is prone to imprudent policy moves, which would undermine these goals.
  • Real GDP growth is forecast to average 7.3% in 2013-17, supported by large investments in infrastructure and mines, a surge in copper production and robust growth in services and agriculture.
  • The kwacha is forecast to depreciate by an annual average of 4%, to an average of ZK6.24:US$1 in 2017, as strong growth in foreign investment and exports is offset by robust import demand and a strong US dollar.
  • The current-account position is expected to deteriorate in 2013 as imports grow rapidly, to improve in 2014-16 as production of copper-the country's main export-rises sharply and to weaken in 2017 as export growth slows.

  Review

  • The government's harassment of the opposition has continued to grow, marked by the arrest of the two main opposition leaders and its increasing use of the controversial Public Order Act to prevent public rallies.
  • The government is working towards lifting the immunity from prosecution enjoyed by the former president, Rupiah Banda, in order to press corruption charges against him, but is unlikely to succeed.
  • The operating licence of the Chinese-owned Collum coal mine has been revoked by the government on the grounds that its owners have violated safety and environmental laws and failed to pay mineral royalties.
  • The kwacha has depreciated by a monthly average of over 1% so far in 2013, compared with 0.2% in the second half of 2012, although its performance is expected to improve as copper production grows.
  • Zambia's large infrastructure needs have led to a surge in appetite for bond issues among parastatals and municipalities, although the proposed US$5bn worth of bond issues in 2013 will not be fully realised.
  • Foreign direct investment pledges more than doubled to US$10.1bn in 2012, although this is partly a result of short-term factors such as high international copper prices and low returns on Western securities.

  March 07, 2013

Economy:

• Background

  Zambia: Economic background

  Real gross domestic product by sector
  (% share of GDP)
  	2003	2004	2005	2006	2007
  Agriculture	22.8	20.8	18.5	17.9	17.4
  Industry	27.1	26.8	25.1	25.9	26.1
  Services	50.1	52.4	56.3	56.2	56.5
  Sources: World Bank; Economist Intelligence Unit.

  Download text file (csv format)

  July 31, 2008

• Structure

  Zambia: Economic structure

  Data and charts: Annual trends charts

  
  

  

  March 07, 2013

• Outlook

  Zambia: Country outlook

  Zambia: Country outlook

  FROM THE ECONOMIST INTELLIGENCE UNIT

  POLITICAL STABILITY: The president, Michael Sata, and his party, the Patriotic Front (PF), are expected to remain in power, at least until the next elections in 2016. No single party holds a majority in the National Assembly, but the PF's representation is likely to grow slightly, as the party has some success in wooing members of parliament from the former ruling party--the Movement for Multiparty Democracy (MMD)--through offers of political office.

  ELECTION WATCH: The next elections, due in 2016, are expected to be free and fair, although the run-up to voting is likely to be marred by bias in the state-owned media and the incumbents' use of public resources to fund their campaigns. Some election-related violence could occur, particularly if Mr Sata continues to antagonise the opposition. The result of the elections will depend on whether the PF lives up to its campaign promises--its progress so far has been poor--and whether the MMD is able to revamp its corruption-tainted image.

  INTERNATIONAL RELATIONS: The public takeover in February of the Collum coal mine--which was owned by a Chinese businessman--could sour bilateral relations between Zambia and China, although any such impact will be limited by China's hunger for natural resources and the need to protect its other substantial economic interests in Zambia. Relations with Western donors would deteriorate if the government's heavy-handedness towards the opposition were to worsen, creating the risk of aid cuts. Zambia is expected to remain largely on good terms with other countries in the region. These relationships will be supported by its membership of two regional trade blocs: the Common Market for Eastern and Southern Africa (Comesa) and the Southern African Development Community (SADC). Mr Sata has expressed support for Zimbabwe's president, Robert Mugabe, placing him among a number of his peers in SADC but at odds with South Africa.

  POLICY TRENDS: The policy agenda will remain geared towards boosting revenue from mining, supporting local enterprises, tackling unemployment and raising domestic purchasing power. Further measures are likely to raise the tax take from mining, partly by ensuring better compliance with existing tax rates. The government has also said that it will negotiate increases in its stakes in the mines to 35% (from 10-20.6% at present). The mining companies' reaction to recent changes (including a doubling of the royalty rate on base metals from 3% to 6%) has been muted, and the Economist Intelligence Unit believes that further changes are likely to be tolerated, as long as they are not handled badly. (If, for example, the government were to renege on its commitment to increase its stakes in the mines via negotiation rather than coercion, investment would fall.)

  ECONOMIC GROWTH: We estimate that real GDP growth moderated to 6.1% in 2012 as maize and copper output fell, offsetting the impact of expansionary fiscal policy and a large increase in minimum wages. We forecast that growth will pick up to 6.8% in 2013 as maize and copper output recovers, while investment in power, roads and mines continues to grow rapidly. In 2014-16 growth is expected to increase further to an annual average of 8.1% as copper production soars on the back of the completion of major projects at the Kansanshi, Lumwana and Konkola mines and First Quantum's new Trident mine. In 2016 growth will also be supported by a rise in public spending ahead of the elections. A moderation in growth to 5.5% is expected in 2017 as the copper boom winds down, but other sectors will continue to grow robustly.

  INFLATION: Inflation is expected to remain in single digits in 2013-17 as output of the staple food, maize, exceeds domestic demand, helping to curb food prices, which account for 53% of the consumer price index. A relatively stable exchange rate will also check inflation by limiting growth in the price of imports. We forecast that inflation will ease from 6.6% in 2012 to 6.4% in 2013 as fiscal policy is tightened and growth in electricity prices slows (following large tariff increases towards cost-recovery levels in recent years). It is expected to remain close to that level in 2014-17 as tighter fiscal policy counters the impact of a gradual increase in global oil prices. Despite the expected maize surpluses, we do not forecast a sharper decline in inflation as problems with the maize distribution system, coupled with poor infrastructure, will continue to contribute to occasional, localised shortages. Prices would rise more sharply than forecast in the event of drought, as agriculture is largely rain-fed, or if the recently imposed price cap on maize were sustained, undermining incentives to produce the crop and leading to lower supply over the medium term.

  EXCHANGE RATES: The kwacha's value will be supported by strong growth in copper production in 2014-16, large foreign investment inflows, high public external borrowing and relatively low domestic inflation. This will be offset by robust import demand, a stronger US dollar and a winding-down of the boom in global copper prices. Overall, we expect the kwacha to depreciate by an annual average of 4%, from an estimated ZK5.15:US$1 in 2012 to ZK6.24:US$1 in 2017. Our forecast of average depreciation of 7% in 2013 could be exceeded if the political outlook deteriorates more severely than expected or prolonged delays occur in restarting copper production at the Chingola mine. The introduction of a new, rebased currency in January has altered the value of our forecasts--for example, from ZK5,508:US$1 to ZK5.51:US$1 for 2013--although their substance has remained unchanged.

  EXTERNAL SECTOR: Trends in the current account will continue to be shaped by the trade surplus. This is forecast to widen from 5.4% of GDP in 2013 to almost 18% of GDP in 2016, driven by a surge in output of copper (which accounts for more than 80% of exports), before moderating in 2017. Imports will grow robustly during the forecast period, driven by high domestic demand and strong investment growth. The services deficit is forecast to widen as tourism growth is outweighed by a rise in services debits (in line with goods imports). The income deficit is expected to grow steadily as mine profits rise. Transfer inflows are forecast to increase in line with aid, but will remain small and have little impact on trends in the current account.

  March 11, 2013

• Forecast

  Zambia: 5-year forecast summary

  Outlook for 2013-17: Forecast summary

  Forecast summary
  (% unless otherwise indicated)
  	2012a	2013b	2014b	2015b	2016b	2017b
  Real GDP growth	6.1	6.8	8.3	8.1	8.0	5.5
  Gross industrial growth	4.9	8.7	13.1	11.8	10.0	5.7
  Gross agricultural production growth	3.0	4.8	5.5	5.8	6.0	5.8
  Consumer price inflation (av)	6.6c	6.4	6.5	6.4	6.8	6.5
  Consumer price inflation (end-period)	7.3c	5.8	6.0	6.2	6.0	6.3
  Lending interest rate (av)	12.1c	9.8	10.0	10.4	10.2	10.0
  Government balance (% of GDP)	-4.9	-5.8	-3.9	-1.9	-3.0	-2.4
  Exports of goods fob (US$ m)	8,697	9,196	11,632	14,154	16,613	17,687
  Imports of goods fob (US$ m)	-7,374	-8,048	-9,074	-10,234	-11,573	-12,788
  Current-account balance (US$ m)	-894	-1337	-661	-28	362	-168
  Current-account balance (% of GDP)	-4.3	-6.3	-2.8	-0.1	1.3	-0.6
  External debt (year-end; US$ bn)	4.7	4.9	5.1	5.4	5.7	6.0
  Exchange rate ZK:US$ (av)	5.15c	5.51	5.76	5.85	6.07	6.24
  Exchange rate ZK:¥100 (av)	6.43c	5.94	6.10	6.08	6.22	6.46
  Exchange rate ZK:€ (av)	6.61c	7.33	7.56	7.43	7.64	7.87
  Exchange rate ZK:SDR (av)	7.94c	8.39	8.72	8.74	9.01	9.28
  a The Economist Intelligence Unit estimates. b The Economist Intelligence Unit forecasts. c Actual.

  Download the numbers in Excel

  Download text file (csv format)

  March 07, 2013

View detailed map

Country Briefing

Land area

752,612 sq km

Population

13.83m (World Gazetteer estimates, 2012)

Main towns

Population in '000 2012 (World Gazetteer):

 Lusaka (capital): 1,526

 Kitwe: 562

 Ndola: 518

 Kabwe: 221

 Chingola: 183

 Mufulira: 144

 Livingstone: 141

 Luanshya: 134

Climate

Tropical, cool on high plateaux

Weather in Lusaka (altitude 1,277 metres)

Hottest month, October, 18-31°C; coldest month, July, 9-23°C (average daily minimum and maximum); driest month, August, 0 mm average rainfall; wettest month, December, 231 mm average rainfall

Languages

English (official), Nyanja, Bemba, Tonga, Lozi and other local languages

Measures

Metric system

Currency

Kwacha (ZK)=100 ngwee

Time

2 hours ahead of GMT

Public holidays

New Year's Day (January 1st), Good Friday, Easter Monday, Labour Day (May 1st), Africa Day (May 25th), Heroes' Day (first Monday in July), Unity Day (first Tuesday in July), Independence Day (October 24th), Christmas (December 25th-26th)

January 09, 2013