The two leading candidates in Zambia’s presidential election are in a tight race. The result will have a big influence on the country’s future economic directio

Simuzingili, Muloongo

LSE Research Online

21/06/2017 Post-election challenges for Zambia - IGChttp://www.theigc.org/blog/post-election-challenges-for-zambia/ 1/3Authors MuloongoSimuzingiliCountry EconomistResearcherPublished on: 23 Jan 2015Countries: ZambiaResearch themes: Inclusive Growth,State Post-election challenges forZambiaThe two leading candidates in Zambia’s presidential electionare in a tight race. The result will have a big influence on thecountry’s future economic directionCelebrations of the National Jubilee as Zambia marked 50years of independence on 24 October 2014, brought a sense ofunity across the nation. It was only a few days later that theannouncement of President Michael Sata’s death dampened thiscelebratory mood, and the country immediately went into aperiod of national mourning. An experience Zambia has gonethrough before following the death of President Levy PatrickMwanawasa in 2008. In the event of a death of the RepublicanPresident, the constitution states that a presidential by-electionshould be held within 90 days – and during this period the vicepresident will act as president. Guy Scott is now the actingpresident of Zambia.Nonetheless, the presidential by-elections have brought elevenpresidential candidates to contest the 2015 by-election. Despitethere being many candidates, the race is effectively between the2 favourites; Edgar Lungu of the ruling Patriotic Front (PF) andHakainde Hichilema of the United Party for NationalDevelopment (UPND).The key issueWhile the question of who will be the next president remains,Zambia’s current economic situation cannot be overlooked.Growth in GDP has averaged above 5 percent for over a decadenow but some analysts have come to describe this as a ‘joblessgrowth’ as it has failed to translate into job creation andpoverty levels still remain high. Mining remains the countriesmajor contributor to tax revenue and export earnings, and lossin investment or production could put pressure on thefavourable growth that Zambia has been experiencing. Withuncertainties in terms of the global demand for copper, there isimmense risk that prices could fall to unfavourable levels. Therehas already been a slowdown in FDI inflows as a result ofsubdued global demand and weaker commodity prices. Theincoming government has to work towards diversifying theeconomy away from Copper and actively promote the growingnon-traditional exports which have shown potential to reducethe burden on metal exports. Import prices have been highfollowing the fluctuation in the exchange rate.Improving Zambia’s performanceThe 2 leading political contenders have so far shown great21/06/2017 Post-election challenges for Zambia - IGChttp://www.theigc.org/blog/post-election-challenges-for-zambia/ 2/3desire to improve Zambia’s economic performance. In additionto continuing Michael Sata’s legacy of pro-poor growth policiesEdgar Lungu (PF) has promised to work towards improvingservice delivery, reducing the price of consumer goods andencouraging the diversification of crop and economicdiversification. He has further pledged to continue with one ofZambia’s most ambitious but also expensive road infrastructureprogramme throughout the country that Sata started. Inaddition, he is committed to improving the agriculture sectorthrough timely provision of farming inputs and finding marketsfor the farming products. Edgar Lungu (PF) also intends toengage the mines in the provision of education facilities toindividuals and will prioritise economic empowerment forwomen and job creation for young people. In an effort to createnew jobs and reduce poverty, he will work towards makingsome towns industrial hubs.Hakainde Hichilema (UPND) on the other hand wants to run amarket economy in which the private sector will be the engineof growth and his government will provide an environment forthe private sector to thrive. He hopes to promoteindustrialization by offering start-up capital and technologytransfer to SMEs. To further address the unemployment and jobcreation problem, robust policies that include public, privatepartnerships (P.P.P) in all sectors of the economy and supportsuch as guarantee loans schemes to labour intensive companieswill be put in place. In addition, his government intends torealign the tax regime to international standards such asmineral royalty, corporate tax and windfall tax; restructure theprecious and semi‐precious mining sub‐sector; and provideinitial mining support services by providing seed capital tocover initial exploration costs or link them to capital markets.Hakainde Hichilema (UPND) has further pledged to implementfree education in primary and secondary schools, and provideremuneration based on qualification, experience andproductivity. He will also focus on health and housing, byimproving access to quality health care and through lowermortgage rates for house buyers.Political and economic anxietyIn the face of all the political and economic anxiety, theInternational Growth Centre in Zambia stands ready to up itspolicy engagement with whoever will be part of the newgovernment that may come with the change of the head of state.Currently, IGC is working on assessing the Property Taxationand Mining Rights Tax System in Zambia in order to improveDomestic Resource Mobilisation – a core objective ofGovernment. IGC, through its urbanisation programme is alsostrategically positioned to provide input to Zambia’s first everUrbanisation policy being led by the Ministry of LocalGovernment and Housing.Zambia has always experienced peaceful elections, and there isno reason to believe this will not be the case now. As a newpresident steps into power, the new government should remaincommitted to working towards economic and socialdevelopment in the country.21/06/2017 Post-election challenges for Zambia - IGChttp://www.theigc.org/blog/post-election-challenges-for-zambia/ 3/3

Post-election challenges for Zambia

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