Neoliberalism, big capital and the Zambian crisis

Zambia’s main problem is foreign control of its national resources.

Zambia copper mine, AP
Zambia is the world's seventh largest producer of copper - a metal essential to economic development of the global North and BRICS, writes Laterza [AP]

Zambia’s opposition leader Hakainde Hichilema and five others were arrested two months ago on treason charges. As the court proceedings drag on, they remain in custody and have recently been transferred to a maximum security prison.

According to the state prosecutors, Hichilema’s motorcade intentionally blocked President Edgar Lungu’s convoy on the way to an important traditional ceremony in western Zambia. Hichilema is accused of trying to overthrow the government. He contested last year’s presidential election at the head of the United Party for National Development (UPND) and lost to Lungu by a narrow margin. He never accepted the results and accused Lungu of rigging the vote.

The case has attracted widespread condemnation internationally, causing more clamour after South African opposition politician Mmusi Maimane was refused entry into the country when he wanted to attend Hichilema’s trial.

Several civil society organisations read the arrest of the opposition leader as the culmination of Lungu’s ongoing clampdown on democratic freedoms and dissenting voices. At the end of 2014, Lungu took over as the leader of the ruling party Patriotic Front (PF), after a succession struggle following the death of President Michael Sata. Since then, there has been an escalation of political violence among supporters of the two main parties, mass arrests of opposition members, and a systematic silencing of the media, including the closure of The Post, the country’s biggest independent newspaper.

Democratic freedom fighter vs anti-imperialist hero?

For his supporters, Hichilema has become “Zambia’s Nelson Mandela”, the icon of the struggle against Lungu’s “dictatorship”. On the other side of the barricades, Lungu’s spin doctors portray the president as a people’s hero, allegedly protecting the country from Western interests meddling in internal affairs.

Neither of the two narratives captures what is at stake. Western media coverage has also been lacking, focusing exclusively on the deficit of democracy. Increased attention to Zambia’s troubles has less benevolent reasons.

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The southern African country is the world’s seventh largest copper producer. This metal is essential to economic development in the global North and BRICS. While Chinese investment is growing, the main player in the Zambian mining sector is white capital from South Africa and the West.

There are considerable reserves of uranium, a mineral in high demand with the increase of civilian nuclear energy projects around the world. Uranium is of strategic interest to global superpowers, as fears of global conflict fuel debates about propping up nuclear arsenals.

Zambia, like the rest of Africa, needs a new deal to recover its stolen wealth parked in tax havens around the world.


Zambia has close trading links with Democratic Republic of Congo, especially the copper-rich Haut-Katanga Province in the southeast. In Congo, power struggles and ethnic tensions in mineral-rich areas are increasing.

In Zambia too, there are fears about growing ethnic rivalries. Last year’s presidential vote in the rural areas was divided along ethnic lines. North-Western, Western and Southern Provinces voted for Hichilema, while other four rural provinces supported Lungu. These fractures could be manipulated by foreign interests to destabilise the country in order to ensure control of mineral resources.

There is a historical precedent in Congo. The Katangese secession movement of the 1960s was supported by Belgian interests in exchange for mineral wealth, with the collusion of other Western governments and companies.

The rise of the neoliberal state

In the 1990s, aggressive structural adjustment programmes spearheaded by the IMF and World Bank led to the privatisation of the mines and other key industries. This reversed the gains made by successful nationalisation programmes under the one-party state led by former President Kenneth Kaunda.

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In the new democratic dispensation, politicians operated as local agents of foreign capital. They sold off national assets for a fraction of their value and brought taxation revenues and public spending to appalling lows.

According to a 2015 report, the country is losing $3bn a year in tax dodging by multinational mining companies. Repeated attempts by successive governments to change this state of affairs have been neutralised by mining lobbies.

Collision and collusion

Lungu could not have won the 2016 election without the support of former President Rupiah Banda, who led the exodus of powerful factions of the Movement for Multi-Party Democracy (MMD) into the PF ranks. The MMD was in power from 1991 to 2011.

Seated at the opposite ends of the political spectrum, Hichilema and Banda hold similar views about the economy. Banda has strong ties with big capital, and exerts considerable influence over government economic decisions.

The opposition leader is a prominent businessman that benefited from privatisation and is closely aligned with Western investors. Many former MMD officials in the PF government are linked to both Hichilema and Banda and their national and international networks.

Despite his recent anti-colonial rhetoric, Lungu himself has ordered the state’s mining investment arm to drop a $2.3bn fraud court case against Canada-based mining company First Quantum Minerals. The dispute will be settled out of court.

Media close to Banda have been critical of Lungu’s recent excesses, signalling an internal power struggle between Lungu and the former president. After all, Hichilema’s arrest is not good for business.

The IMF is back

The government is in negotiations with the IMF over a $1.3bn loan to avoid default on its public debt. In recent years, Zambia and other African states borrowed heavily on the international bond markets.

Since the commodity downturn in 2015, investors’ confidence and state revenues have gone down, while interest on debt has gone up. Zambia risks losing the few strategic assets still under state control. The announced 75 percent electricity tariff rise will further aggravate the dire economic conditions of most people, who are struggling with mass unemployment caused by the contraction of the mining sector. Cuts to fuel subsidies are also in the cards.

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The details of the deal have been kept outside public scrutiny, but the IMF’s familiar rhetoric about fiscal discipline suggests hefty conditionalities. Hichilema, the “martyr” of democracy, rarely mentions the IMF loan and his uncritical support is well-known.

The negotiations are overseen by Finance Minister Felix Mutati, a pro-business technocrat from Banda’s former party. However, Lungu has been reluctant to seal the deal. He probably fears that the devastating effects of more austerity and privatisations will catalyse mass unrest against his rule.

Zambia, like the rest of Africa, needs a new deal to recover its stolen wealth parked in tax havens around the world. Big capital from the West and BRICS have coopted local politicians at the expense of the vast majority of citizens. The priorities should be nationalisation and redistribution programmes.

Zambia cannot go at it alone. There is a need for a strong African Union and regional alliances to fend off the rule of foreign capital. The popularity of similar proposals in the West – for instance, Jeremy Corbyn’s Labour Manifesto in Britain – can be harnessed to normalise African demands.

Neither Lungu nor Hichilema is the right person for the job. And international media’s narrow focus on electoral democracy does more harm than good.

Vito Laterza is a research fellow a the Department of Social Anthropology, University of Oslo. He is an anthropologist and political analyst focusing on politics, economy and society in sub-Saharan Africa.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial policy.