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No New Beginning for Zambia

Across the street from where I live in Somerset is a white Zimbabwean farmer. He and his family live today in a broken-down building on a small-holding that is owned by a romany landlord, of which there is large community in these parts. He is so skilled that he has restored the land, planted a beautiful garden for nature, keeps geese, turkeys, chickens for eggs; with his wife, makes jams and gins with the fruits of the earth. But he is in the UK because he cannot live in Zimbabwe. Last week he was joined by a pastor who left Zimbabwe with two suitcases and no money. But it was better than staying in Zimbabwe.

The tragedy for Zambia – a country I love – is that it is only inches away from becoming Zimbabwe.

If all had been orderly in 2014 at the time of President Michael Sata’s death in office, Guy Scott, his Vice President, would have seen out the balance of his term as acting President. Scott was eminently qualified for the job – one of a small group of white North Rhodesians who stayed on after independence in 1964 – and who was entirely committed to the country. However, constitutionally, a muzungu (white person) was not legally allowed to become president, so the exquisite problem of a descendant of colonials becoming President of a post-colonial African country did not arise. Scott’s role would have been to ensure an orderly process. Instead, history took a different turn and Edgar Lungu, a former minister of Justice and Defence, together with a party cadre seeing their chance, took control of the apparatus. Lungu became effective President three months after Sata’s death – and Scott was sent back to his farm.

Who am I, you might ask, to comment on the internal matters of a sovereign state? Well, I suppose, one qualification might be as an ordinary concerned citizen of the world, and another that I have travelled annually to Zambia since 2008 and have had the chance to observe the Zambia of today close-up via the schools, hospitals, outlying villages, and mines I have visited.

This was a country which was one of the most peaceful in Africa; one that appeared to have put aside tribal conflict and was convinced of its one nation credentials, proudly taking in the refugees from warring nations surrounding it – whether Rwandans escaping the genocide or white Zimbabwean farmers fleeing Mugabe land-grabs. A doctor, with whom I used to travel, put Zambia’s tolerance of its former colonial masters down to the Scottish missionaries who were prevalent in Northern Rhodesia. “The Scots were ‘less colonial’, he said, “having suffered in their own way at the hands of ‘British colonialism’”. Meanwhile, the population near the northern mines of the copper-belt enjoyed a standard of living that was generally good, although perhaps not as luxurious as it had been in some other parts of greater Rhodesia, such as Salisbury in its hey-day.

Certainly, Independence has not been managed well. Zambia’s first President, Dr Kenneth Kaunda, still battling on at 96, put socialism before reality, thinking copper could pay for everything. That didn’t work out. So by 2000 with the nation suffering famine, copper below $1 per lb, and massive debt to lender countries, the IMF and World Bank combined to demand that Zambia privatise all its copper assets or they would not lend another dollar.

In some ways the next period was one of recovery, with investment coming in from Glencore, First Quantum, Vedanta, the Chinese, and others. But some of the shot-gun deals left much to be desired. Investment went hand in hand with generous tax relief  so that the nation denied itself revenue with which to re-invest in schools, hospitals, roads and other infrastructure. With copper prices reaching $4.50 per lb by 2010, Zambia’s S&P rating was good and so the government went back to old habits – borrowing to stay in power and give its impatient electorate some evidence that life could improve.

And so, not two decades later, Zambia is once again one of the most indebted per capita nations in Africa. The debt is so huge that the country is like a person with a spending habit and a short-term loan from Wonga.

Meanwhile, the Chinese are knocking on the door.

This, I would like to explain, is the context for the expropriation of Vedanta’s Konkola Deep (KCM) and events that now mean that, as of last week, friends of mine in Mufulira tell me they experienced load-shedding of 18 hours per day, while food rotted in fridges and surgeons could not perform operations. The Zambian energy provider, Zesco, and the government, advise the populace to save electricity by not using their kettles, and blame climate change or the low level of water in Lake Kariba for their ills. But the reality is that years of under-investment in infrastructure are a more likely cause.

I am not an apologist for the virtues of Vedanta. Their performance around the world leaves much to be desired. Their ownership of the Tuticorin smelter in India, and the shooting of 13 local people by local Police in Tamil Nadu for the impertinence of demonstrating against the respiratory deaths thought to be caused by the smelting of dirty copper concentrates and poor gas capture counts badly against them – as does their attempt to mine bauxite in Orissa from the holy mountain on which the Dongria people had worshipped for millennia. And the recent high court case in London which upheld the claim of 1040 villagers that their water had been poisoned by the Konkola Copper Mines (KCM) operation is an awful indictment.

However, none of this, can truly be said to justify the Zambian Government’s short-cut in seizing Vedanta’s KCM assets in May of this year – the Nchanga Copper Smelter (310,000 tpy capacity) and its 79.4% of KCM. Instead, like the tolling of a bell to sound the death-knell of Zambia’s exceptionalism in Africa, the liquidation order had the ring of Mugabe and Zimbabwe all over it.

Furthermore, the government’s precipitate action suggests they think that mines can be turned on and off like taps, while in fact the lasting damage that even an interim cessation to this deepest of mines will likely be catastrophic. Some even suggest that the lack of revenue from Vedanta’s operations is connected to some of Zesco’s problems.

Zambia has chosen a dark and banal path. The government has few options now and it would be hard not to imagine that in some form or other the Chinese will be waiting to pick up any assets other investors are forced to relinquish. These events will surely reverberate in the boardrooms of Zug and Toronto and on stock markets where mines in Zambia are listed.

Zambia is due for elections in 2021 but since Lungu came to power, newspapers have been closed, media is gagged, and the leader of the opposition Hakainde Hichilema (known as HH to his followers) has been arrested in Ndola while preaching a sermon in Church, and his followers attacked by security forces aligned to the government of the day.

Across the street in Somerset, I cannot help but conclude, it will not be long before pastors from Zambia – not just Zimbabwe – will be emigrating to escape a country they love but cannot live in.

Published December 18th 2019 on www.lord-copper.com