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EIU Sees PF Victory in 2021

The Economist Intelligence Unit (EIU) expects the Patriotic Front of President Edgar

Lungu to remain in power beyond 2021, but warns that the government will become increasingly unpopular due to economic mismanagement and deepening autocracy.

In its latest release, the EIU has stated that the PF’s central committee support for President Lungu would help secure an adoption and subsequent win in the coming elections.

“By the time of the election in 2021, the possibility of Zambia’s being caught in a debt trap – characterized by a loss of economic sovereignty to creditors – will be a key concern among voters. Because of high debt-servicing costs, fiscal space will also have been tightened, causing salaries to be frozen and subsidies cut. With Mr Lungu’s popular support looking weaker than ever, we expect elections to be neither free nor fair, with the government making maximal use of its incumbency advantages. The United Party for National Development (UPND), together with a new generation of opposition parties, will have to surmount these challenges,” the EIU stated. “A revitalised Movement for Multiparty Democracy (a former ruling party) could also emerge as a notable political force. The UPND’s candidate is likely to present a reasonable challenge to Mr Lungu in the presidential election, but the party has lost its way since the 2016 election. The opposition vote is also vulnerable to fragmentation unless alliances are formed. Our baseline forecast remains that (amid deep popular dissatisfaction) Mr Lungu will win in 2021, but only by further eroding democratic checks and balances. This forecast could easily change if opposition parties agree to form a broad-based coalition.”

It stated that Zambia will face substantial threats to underlying political stability between 2019 and 2023 and warns that simmering popular frustration over economic and political grievances could quickly turn violent.

“The run-up to the 2021 legislative and presidential elections will be an especially unstable period, during which a vulnerable government will narrow the political space aggressively and escalate crackdowns. Another layer of potential risk emanates from the growing influence of China in Zambia’s affairs, with growing suspicion that to get debt relief the government plans to sell off key state assets to China,” EIU stated. “This is not just an abstract concern: in late 2018 the issue caused rioting in the city of Kitwe. As public distrust of the government grows, open dissatisfaction and the administration’s intolerance of criticism will create a volatile mix. Protests could turn violent and, if disorder becomes widespread, extra security powers could come into force.”

It stated that extra security, on one hand, could act as a mechanism for bolstering overall stability.

“…on the other, it would reinforce perceptions that Zambia is staggering towards autocracy and exacerbate underlying social tensions. In May, the justice minister, Given Lubinda, extended the work of a controversial body known as the National Dialogue Forum (NDF), allowing it to continue adopting draft bills to amend the constitution and pre-existing legislation, such as the Public Order Act of 1955,” it stated. “The NDF’s recommendations will be voted on by a parliament in which the government commands a comfortable majority of legislators. The NDF’s work has become bitterly politicised, with opposition parties alleging that any changes will be biased in favour of the PF. In the run-up to the 2021 elections, internal power struggles will take place within the PF. As Mr Lungu works to retain the presidency in 2021, potential rivals will be purged from the cabinetcand possibly the party before PF nominations in 2020. After a ruling by the Constitutional Court declaring that he was eligible to stand for another term (his critics claim that he has already served the maximum of two), the president publicly hinted that some party factions had been manoeuvring to seek the candidacy were he to be barred from standing.”

On international relations, the EIU states that Zambia’s relations with Western donors and multilateral financial institutions will deteriorate.

“The IMF is not expected to agree a deal with Zambia within the forecast period, and traditional donors (including the UK, the EU and the US) will also stay away amid concerns about corruption, authoritarianism and uncontrolled borrowing. Spurned by the West, Zambia will continue to deepen its dependency on its main bilateral creditor, China. In exchange, Chinese state-owned lenders will probably agree to debt restructuring, preventing a sovereign default. However, the restructuring will be on the proviso that the government borrows more (albeit at a lower rate) for a string of Chinese-contracted infrastructure projects, and potentially allows debt-for-equity swaps on state-owned enterprises,” stated EIU. “As a consequence, the government’s dependence on China will be a double-edged sword, providing some financial relief in the short term, but compromising relations with Western donors and investors (many of whom regard an IMF package as indispensable), as well as jeopardising long-term debt sustainability.”

Source: Zambia Reports

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