Zambia’s elections: The aftermath
By Archimedes Muzenda
Zambia’s 2016 Presidential and Parliamentary elections ended in a tight race with the incumbent president declared the winner of the elections. President Edgar Lungu of the ruling Patriotic Front (PF) party secured 50.35% of the vote against Hakainde Hichilema of the opposition United Party for National Development (UPND) who received 47.67%.
However, disputes have been raised around the results. On top of the pre-election violence and alleged censorship of independent media, the opposition leader Hakainde Hichilema has raised allegations of electoral fraud, which of course has been vehemently denied by President Lungu. Hichilema has withdrawn his UPND party from the ballot verification process and is appealing to the National Constitutional Court over alleged vote tampering. This may postpone the inauguration of the President, which is due to take place on 23 August 2016. UPND submitted its appeal on the 17th of August and the Constitutional Court has 14 days to settle the matter. Noteworthy scenes in what is commonly known as one of Africa’s most stable democracies.
With President Lungu re-elected for a further 5 years, his administration will continue its policies of supporting lower income groups against the winds of copper price fluctuations, droughts, budget deficits and the prospect of continued tension over the closely fought election.
Nevertheless, the post-election landscape will be heavily influenced by the outcome of the forthcoming IMF bailout negotiations. The negotiations - postponed to the fourth quarter of 2016 - will now be resumed. Technocrats within Zambia’s Ministry of Finance recommended that the tough measures, installed within the terms of the bailout, should be implemented after the elections. This will undoubtedly lead to social concerns as the government is pressured to adjust its economic programme. Two outcomes are possible:
- Terms of the IMF bailout are accepted. This would mean the progressive removal of subsidies on energy and agriculture. Given the tough measures proposed within the terms and high rates of sovereign bonds that will be issued, Zambia will have to use the bailout fund on capital expenditure to ensure an economic recovery. This will enable spending on much needed energy infrastructure projects even though capital spending cannot be guaranteed. An acceptance of terms will likely subdue consumer spending.
- Negotiations fail as Lungu deems the terms to be unacceptable (subsidies will be a key factor). If the negotiations fail there is likely to be an increase in interest rates, a devaluation of the Kwacha, and tightening of available external financing options in the near future. This outcome will overshadow any other economic possibility as Zambia seeks an economic recovery.
A key factor in the IMF bailout negotiations is the outcome from the constitutional referendum that also took place on August 11th on whether to amend Zambia’s Bill of Rights. The Bill gives citizens the right to food, shelter, employment and healthcare. The voting of both a constitutional referendum as well as a presidential election on the same day received criticism, but the referendum’s results have yet to be announced with many sceptical over whether it will be voted in. If a new Bill of Rights is passed, it will give Lungu a reason to refuse the terms on government subsidies proposed within the bailout to the detriment of the economy.
Africa’s second largest copper producer has been hit hard by the collapse in commodity prices and is facing significant challenges to finance its budget deficit. Zambia’s rating will likely be cut further this year as rising government debt continues to match expectations of reaching 60% of GDP by 2018. All eyes will be on negotiations with the IMF, which will now steer Zambia’s economic future.
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