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31. Appraising Intergroup Contact in Zambia’s Electoral Politics

Author:
Kabale Ignatius Mukunto
Publication Date:
09-2019
Content Type:
Journal Article
Journal:
Conflict Trends
Institution:
The African Centre for the Constructive Resolution of Disputes (ACCORD)
Abstract:
While senior leaders on both sides of Zambia’s political divide may communicate civilly when faced with differences, the majority of their rank and file members seldom do so. For the latter, the handling of political conflicts is synonymous with violence. The socialisation of the current cohort of political party stalwarts is devoid of peace-oriented mechanisms of dealing with political dissent. Electoral politics have continued to be characterised by skirmishes, discontent and violence, 54 years after the country’s political independence. Political players are no strangers to polarisation, and differences in ideologies or ascension to leadership positions have culminated in splinter parties. What is worrisome is the propensity for violent engagements when managing political disagreements, especially at the lower strata of the Zambian polity. There is very little effort invested in cultivating an environment that facilitates collegial contact among political party affiliates. Such an environment of contact may also promote and support mutual understanding, tolerance and a sense of coexistence. Contact and learning about other parties (outgroups) reduce preconceptions and negative assumptions that drive hostilities, antagonisms and violence within the polity. Elite interparty interactions, even if on a slighter scale, also ought to permeate all political party structures horizontally. This article therefore appraises intergroup contact in light of Zambia’s electoral politics and the emergent violence.
Topic:
Elections, Ethnicity, Peace, and Political Culture
Political Geography:
Africa and Zambia

32. Leveraging the BRI for Africa’s Industrialisation and Intra-Trade (Opportunities for the AfCFTA)

Author:
Mwanda Phiri and Nakubyana Mungomba
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
Zambia Institute for Policy Analysis and Research (ZIPAR)
Abstract:
Two initiatives have recently gained prominence, one on the global stage and the other in Africa: China’s Belt and Road Initiative (BRI) and the African Continental Free Trade Area (AfCFTA). The former initiative’s primary aim is to build economic infrastructure in the transport, energy and telecommunications sectors in the countries through which the BRI will pass, which has come to include several African countries. Concurrently, the objective of the AfCFTA is to deepen economic integration amongst African states by creating a unified market for goods and services and in the process, propel Africa’s industrialisation and structural transformation. Although seemingly independent, these initiatives converge and present two economic diplomacy instruments that can be leveraged to address Africa’s industrialisation challenge and the bottlenecks to intra-African trade for inclusive and sustainable development. On the back of secondary data sources, this paper explores how the BRI can be leveraged to advance the objectives of the AfCFTA by addressing the financing, infrastructure and productive capacity challenges constraining Africa’s industrialisation and intra-trade
Topic:
Regional Cooperation, Belt and Road Initiative (BRI), Free Trade, and Industrialization
Political Geography:
Africa and Zambia

33. A Review of Pillar I & II of Zambia’s Economic Stabilisation and Growth Programme 2017-2019

Author:
Florence Banda-Muleya, Shebo Nalishebo, Mbewe Kalikeka, Nakubyana Mungomba, Ignatius Masilokwa, and Caesar Cheelo
Publication Date:
06-2019
Content Type:
Working Paper
Institution:
Zambia Institute for Policy Analysis and Research (ZIPAR)
Abstract:
The economic crisis of 2015 destabilised Zambia’s economic performance. The depreciation of the Kwacha and its pass-through effects led to inflation of as high as 22% and growth, at 2.9%, was far below the 5% target. The overall Budget deviation was 15% of Parliamentary appropriations in 2015, disrupting planned activities and attainment of set macroeconomic objectives. There were huge variations between what the consequent national Budgets committed to do and what they actually did. To fix this and nudge the country back towards high sustained economic growth, the Economic Stabilisation and Growth Programme (ESGP) was crafted in 2017. The five-pillar plan aimed to ensure prudent fiscal management by providing a system of accountability and a standard against which results could be measured, among other things. The aim of this paper is to review the ESGP, particularly, its performance in 2018. The paper sets out to understand how well Zambia faired in implementing the ESGP as well as to highlight the broader fiscal trends recently. It ultimately seeks to make recommendations about how Zambia can revive its path to economic stability and growth. The paper focuses tightly on the first two pillars of the ESGP, i.e. (i) restoring budget credibility; and (ii) enhancing domestic resource mobilisation and refocusing public expenditure. The remaining three pillars are slated to be reviewed in the second half of 2019.
Topic:
Budget, Finance, Economic Growth, and Economic Stability
Political Geography:
Africa and Zambia

34. In Further Pursuit of an IMF-Programme: Possible Pathways for Zambia and Lessons for Africa

Author:
Caesar Cheelo and Nakubyana Mungomba
Publication Date:
09-2019
Content Type:
Working Paper
Institution:
Zambia Institute for Policy Analysis and Research (ZIPAR)
Abstract:
Since 2015, Zambia’s real GDP growth has declined markedly, its local currency has depreciated notably with episodes of serious volatility, and the risks of fiscal and debt distress have mounted. As the country searches for solutions, one viable international economic diplomacy instrument might be the IMF. Since its creation in 1945, the IMF has fostered global monetary cooperation, secured financial stability, international trade, high employment, sustainable economic growth and poverty reduction, mainly through: lending, surveillance and capacity building. Zambia has been pursuing an IMF-supported economic programme since about 2016, but with dismal success. In contrast, other economies like Ghana and Zimbabwe appear to be making headway. Key questions emerge from the foregoing: what does the evidence say about the relevance and significance of an IMF-supported programme for Zambia? Why has the country’s recent quest for an IMF deal failed? Does Zambia have feasible pathways to an IMF deal? This paper tackles these issues using simply descriptive statistical analysis, stylized facts and a political economy lens. We highlight a number of specific pathways that Zambia could follow in further pursuit of an IMF-support programme.
Topic:
Political Economy, GDP, Economy, Macroeconomics, Currency, and IMF
Political Geography:
Africa and Zambia

35. Towards 2022: Options for paying back Zambia's Eurobond Debt

Author:
Mbewe Kalikeka, Shebo Nalishebo, and Florence Banda-Muleya
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
Zambia Institute for Policy Analysis and Research (ZIPAR)
Abstract:
On 20th September 2022, Zambia’s first Eurobond will mature. The Government will be required to settle its principal payment amounting to US$750 million in full. Twenty months later in April 2024, the Government will have to settle the second Eurobond worth US$1 billion. The third US$1.25 billion Eurobond will be paid back in three instalments in July of 2025, 2026 and 2027. With less than three years before the first Eurobond matures, there is no clear indication of how and where the money to pay back these Eurobonds is going to come from. This paper considers several options that will mitigate the possibility of a default when the principal payments on the Eurobonds are due. The lack of a payment strategy has made the bondholders jittery about whether they will get their money back. Bondholders have communicated their consternations by dumping the Zambian bonds which are perceived to be risky. With increasing yield rates on the three Eurobonds, of about 17% by end-September 2019, the market seems to have already priced in a default – only nations already in default, such as Venezuela, have yields as high as Zambia’s1. The yield rate is the barometer used to assess the risk inherent in the bond. In general, higher yields mean the bond has higher risk and corresponds to a decline in the value of the bond. There have been efforts made towards establishing a Eurobond Redemption Strategy, but its contents are yet to be publicised. Also, the failure to release the 2020-2022 Medium Term Expenditure Framework by September 2019, and the absence of the 2020-2022 Medium Term Debt Strategy to show a clear borrowing plan have added to the market apprehension. By just about every measure, the Zambian economic fundamentals are fragile. Growth is ailing, prompting the authorities to revise their growth projection targets from 4% to 2% in 2019. Agriculture has been in recession for several quarters now. The 2019 mining fiscal regime that has significantly raised the tax burden on mining companies to unsustainable and uncompetitive levels, coupled with reduced ore grades, has resulted in 8.4% reduction in mining value added in the second quarter of 2019. The electricity load management which commenced in mid-2019 continues to have adverse economy-wide effects. This has implications on revenue targets. Tax revenues in September 2019 were 17% lower than projected, a trend likely to continue at least up to the end of the year. Further, the recent weakness of the Kwacha is not helping either as it has increased the cost of external borrowing and debt servicing, making it prohibitively more expensive to service foreign-currency denominated loans, which include the Eurobonds.
Topic:
Debt, Economics, Markets, Public Debt, and Eurobonds
Political Geography:
Africa and Zambia

36. The Sales Tax Proposal: Are We Beating a Dead Horse? Preliminary results from a rapid assessment

Author:
Shebo Nalishebo and Florence Banda-Muleya
Publication Date:
09-2019
Content Type:
Policy Brief
Institution:
Zambia Institute for Policy Analysis and Research (ZIPAR)
Abstract:
The fiscal authorities have argued that the horse – in this case, (value-added tax) VAT – is dead. In contrast, this rapid assessment argues that the VAT may have been pronounced dead too quickly, perhaps for expediency’s sake. Examples from many countries abound and show that with the right fiscal discipline to ring-fence VAT refunds and improve compliance, VAT works just fine, offering value-added incentives and avoiding cascading effects. In finding a solution for this supposedly dead horse, important questions that we need to ask are “Is the horse really dead? If it is, what killed the horse?” Without this introspection, the other horse in form of Sales Tax, which in fact died and was buried 25 years ago, might be resurrected. Without learning from previous experiences and experiences elsewhere, we are bound to make the same mistakes in trying to resuscitate a truly dead horse.
Topic:
Government, Tax Systems, Economic Policy, and VAT
Political Geography:
Africa and Zambia

37. State of Financial Cooperatives in Zambia: A viable option for increasing financial inclusion?

Author:
Tamara Billima-Mulenga, Felix Mwenge, and Gibson Masumbu
Publication Date:
04-2019
Content Type:
Policy Brief
Institution:
Zambia Institute for Policy Analysis and Research (ZIPAR)
Abstract:
This policy brief presents the summary findings of a study on Promoting Financial Cooperatives (FCs)in Zambia that was conducted between 2017 and 2018 with financial support from the Rural Finance Expansion Program (RUFEP), Ministry of Commerce Trade and Industry (MCTI) and the Zambia Center for Accountancy Studies (ZCAS). The study used both qualitative and quantitative approaches which included a situational analysis of FCs in Zambia, a study tour to Kenya and a Census of FCs in eight provinces. The main objective of the study was to contribute to the development of FCs in Zambia by generating information on their performance. The secondary objectives of the study were to: 1. Undertake a situational analysis to develop a clear understanding of the landscape for the FCs in Zambia in terms of the regulatory framework, support institutions and the nature and level at which the FCs operate. 2. Undertake a Census of FCs to understand the opportunities and constraining factors for the growth of the Cooperatives movement in Zambia. It was envisaged that the study would provide evidence about FCs that could be used in the revision of the Cooperatives Act currently underway, aid MCTI understand the nature of Cooperatives and devise strategies for monitoring FCs. The study also aimed at providing information about the state of FCs that can be used for various purposes by the apex body of FCs and stakeholders such as the Bank of Zambia.
Topic:
Governance, Economy, Trade, and Financial Cooperatives
Political Geography:
Africa and Zambia

38. Nurturing the Seeds of Growth

Author:
Zambia Institute for Policy Analysis & Research (ZIPAR)
Publication Date:
09-2019
Content Type:
Commentary and Analysis
Institution:
Zambia Institute for Policy Analysis and Research (ZIPAR)
Abstract:
The 2020 National Budget is centered on “Focusing national priorities towards stimulating the domestic economy”, a break from fiscal consolidation which has threaded the themes of recent past Budgets. This Analysis describes how Zambia should ensure that the expansionary fiscal policy stance and debt accumulation yield growth rather than stifling it; implementation of the 2020 Budget plants and nurtures seed for growth; and it minds the rising climate change adversities and diminishing social sector support. The Analysis offers key insights and recommendations.
Topic:
Climate Change, Budget, Economic Growth, and Fiscal Policy
Political Geography:
Africa and Zambia

39. Resilience in Zambia: Impact evaluation of the ‘Citizen Participation in Adaptation to Climate Change’ project

Author:
Robert Fuller and Jonathan Lain
Publication Date:
05-2018
Content Type:
Research Paper
Institution:
Oxfam Publishing
Abstract:
The ‘Citizen Participation in Adaptation to Climate Change’ (CPACC) project aimed to build the resilience of farming households to climate shocks, through promoting conservation farming techniques and livelihood diversification, and through supporting disaster-planning activities and early-warning systems at the community level. This Effectiveness Review used a quasi-experimental approach to assess the impact of the project among households whose members directly participated in the project activities, in one of the three districts where the project was carried out. The results provide evidence that the project had a positive effect on the resilience of participant households, particularly through the community-level disaster preparedness activities. There is also evidence that the project had a positive impact on the adoption of conservation farming techniques, on the area of land cultivated, and on yields. However, the project does not appear to have had the positive effects it sought on engagement in non-agricultural income-generating activities, nor on participation in savings groups. There is no indication that the project had had a positive impact on households’ overall material welfare by the time of the survey.
Topic:
Agriculture, Climate Change, Disaster Relief, Environment, and Food
Political Geography:
Africa and Zambia

40. Investment Challenges in Zambia’s Electricity Supply Industry: A Cursory Assessment

Author:
Mwanda Phiri and Francis Ziba
Publication Date:
05-2018
Content Type:
Working Paper
Institution:
Hudson Institute
Abstract:
During the tide of economic liberalisation in the 1990s, Zambia’s electricity market was liberalised with the aim of stimulating private sector participation. More than 20 years after market liberalisation, the power crisis in 2015 revealed that the industry had failed to attract the envisaged private sector investment required to expand and diversify energy generation sources and meet the increasing demand for electricity over the years. It became apparent that the various reforms taken to liberalise the industry, increase private sector participation and promote competition had fallen short of meeting these objectives. Zambia’s electricity supply industry still remained a semblance of a monopoly dominated by one large vertically integrated state-owned corporation responsible for the generation, transmission, distribution and supply of electricity. Given the important role of electricity in driving economic growth, this paper illuminates the barriers to entry in the ESI and the factors limiting competition. Drawing mainly on secondary sources, the study finds that at the very start, limited access to finance for energy projects potentially prevents the commencement of energy projects. Exacerbating the entry barriers are the below-cost electricity tariffs, the monopoly power held by ZESCO and its vertical integration and an inadequate regulatory framework to promote competition and prevent undue political interference. These findings justify the partial unbundling of ZESCO and the provision of legal reforms that support policy consistency, multi-year tariff adjustments and open and nondiscriminatory access to the transmission and distribution grids.
Topic:
Energy Policy, Regulation, Neoliberalism, Tariffs, and Electricity
Political Geography:
Africa and Zambia