By Wakumelo Mataa

Following a rapid increase in its debt stock over the past decade, Zambia has continued to run the economy under a very tight fiscal space as debt repayment obligations left Government with little resources to allocate towards social and economic sectors that safeguard the livelihoods of Zambians and grow the domestic economy.

Recent revelations from the Ministry of Finance indicate that, besides the country defaulting on its interest payment on one of its euro bonds that was due on 14th October 2020, Zambia has actually already defaulted with other creditors. While we remain hopeful that the Country will manage to honour its debt obligations, it has become apparent that we take a glance at the social and economic implications of a sovereign default for an economy like Zambia.

A common finding is that a default may lead to a diminution in capital flows (this may be in part because sovereign defaults often occur together with devaluations). The reduction in investor confidence that follows after a sovereign default in tells a subsequent reduction in foreign exchange inflows over the medium-term which may, in turn, lead to an even deeper depreciation in the Kwacha against major currencies.

Ultimately, this would consequently trigger a sharp rise in the amount of Kwacha that will be needed to service the same amount of debt repayment in dollar terms. Thus, the country may actually find itself in a worse position post-the relief period if exchange rate pressures are not addressed as a matter of urgency.

Moreover, a default ruins the reputation of the country thereby leading to an exclusion of the defaulting country from the international financial market. Hence, Zambia may temporarily lose access to the international capital markets and may be subjected to higher sovereign borrowing costs in its future transactions.

Additionally, holders of defaulted bonds may interfere with cross-border payments to other creditors who had previously agreed to a debt restructuring, such as the G20 creditors and the China Development Bank. If all cross-border payments are blocked, Zambia would not be able to borrow abroad—no creditor would lend if it were unable to collect the payments. This will inevitably present serious challenges to the implementation of the 2021 National budget whose 43% of funding is projected to come from domestic and external financing.

A debt repayment default may also lead to a decline in international trade for at least three reasons: First, creditors could use tariff and nontariff barriers to reduce trade with Zambia. Second, default could lead to the collapse of trade credit, thereby increasing the costs of trade.

Finally, creditors could seize the debtor’s foreign assets, including tradable goods. However, there is little evidence of asset seizures following a default, although, from the creditor’s point of view, this may be a viable option should the negotiations completely break down. For much of history, the doctrine of sovereign immunity prevents creditors from suing a defaulter in foreign courts. Moreover, even if creditors could win a judgment, they would find little to take, since Zambia does not own extensive assets in foreign jurisdictions.

Several recent court cases have illustrated the near impossibility of taking sovereign assets as compensation for default. For example, an Argentine naval ship detained in Ghana on behalf of creditors was released after an appeal to the International Tribunal on the Law of the Sea. Furthermore, a default may lead to costs in other spheres of international relations, particularly those that are called reputational spill-overs. A default will most likely signal that the government is unreliable, not just in terms of debt management, but also in terms of international affairs more generally. Foreign partners might be less willing to make direct investments or enter into trade agreements with Zambia.

The debt implications on social sectors and welfare of the people are quite diverse and are one which Zambia has a history of grappling with. With rising debt, comes also a rise in the cost of debt service which has evidently crowded out Government spending on critical social sectors. Government spending on education and health as an allocation in the national budget has been reducing for the past 5 years. This is below international standards set like the Abuja and the Cairo protocol for which Zambia has committed. This can be strongly tied to the rising allocations towards debt service.

Moreover, the economic impacts of a debt repayment default may have a significant bearing on the social wellbeing of the people. As prices of goods and services increase, the cost of living also increases. For instance, the basic cost of living in Lusaka is K7, 060.00 for a family of 5 according to the Jesuits Centre for Theological Reflection (JCTR). This means more people need assistance through Government welfare schemes such as social cash transfer.

By Charles Kakoma, UPND Spokesman.

Many people are disappointed and upset with the current voters registration exercise. After visiting many registration centres, I met a lot of people who were angry with the way the voters registration exercise was being conducted.

A lot of people had spent long hours on the queues to get a voter’s card. Others had been queueing as early as 03.00 hours but had not been served by 18.00 hours. The slow pace at which the voters registration exercise is being conducted is just irritating. But what caused this mess?

A review of the voters registration programme indicates that the Electoral Commission of Zambia (ECZ) planned to conduct the voters registration exercise a long time ago. They sat down and decided to do away with the old register and introduce a new register incorporating a biometric system. They planned to capture 9 million voters in 30 days. In their meeting, they planned to employ staff, purchase biometric machines, computers, printers, laminating machines, ink, gensets and other materials to enable them achieve their target of registering 9 million voters. So, what has gone wrong?

From the outset when the ECZ announced the programme to register 9 million voters in 30 days, many stakeholders raised concerns or rejected the plan. It was seen as unrealistic and at worst suspected to be a scheme to rig the 2021 presidential and general elections.

The stakeholders argued that there was no need to do away with the old register. What was needed was to update the register to include first-time voters who had just obtained their green National Registration Cards and delete dead people from the register. The ECZ refused with arrogance to listen to the stakeholders and proceeded with the exercise to register 9 million voters in 30 days.

We are now told that since the exercise started two weeks ago, only 1 million people have been registered out of the targeted 9 million voters. At this pace, only about 2 million voters will be registered at the end of one month.

But where did the ECZ, a government institution, get the strength and arrogance to push for a new voters register? The reasonable suspicion is that they were being backed by powerful forces in the ruling party and the government. But what was the interest of these powerful forces to push for a new register?

A review of information which is already in public domain suggests that the ruling party was scared of losing the 2021 elections if the current voters in the register are allowed to vote . The scheme was, therefore, to disfranchise some voters in the perceived opposition strongholds in order to reduce presidential votes for the opposition candidate(s).

This scheme appeared to be well coordinated with the issuance of national registration cards , which was also chaotic and aimed at denying people in opposition strongholds to obtain National Registration Cards. Without national registration cards, the opposition supporters will not be able to obtain voters cards. To date, many people in opposition strongholds have not been able to obtain national registration cards because either the registration officers did not reach these areas or the materials ran out. Meanwhile, the registration officers managed to reach and register people in far flung areas in the so called ruling party strongholds in order to have an in-built majority in the voting system. It is also suspected that some foreigners and under age people were given multiple National registration cards in order to obtain many voters cards to enable them vote many times.

The scheme and organised confusion in the national registration cards exercise is being replicated in the voters registration exercise.
The slow pace at which the voters registration exercise is being conducted is deliberate and was planned. It was planned because the ECZ, working with government, knew how many polling stations the country had and should have bought enough biometric equipment, laminating machines, computers, gensets , ink and other materials to undertake the exercise. But they bought inadequate equipment and materials deliberately. They also provided inadequate staff to man the exercise. Instead of four or five registration officers manning the centre, only one officer in many cases is running the show. What was the motive?

Despite the ECZ knowing how many polling stations the country had, they planned to conduct the exercise only in selected polling stations they placed in phase one to be done in 7 days only instead of the 30 days they had announced. The other polling stations were left out to be considered in other phases. Strictly speaking, the voters registration exercise is not being conducted in each polling station. This has created problems for the voters especially in rural areas where polling stations are several kilometres apart. Some people have to walk the whole day to the nearest voters registration centre. In many cases, they discover that the registration centre is closed because it is placed in another phase of the registration exercise. Due to poor publicity by the ECZ, most voters do not know which designated registration centre is open. Even the location of the registration centre is a challenge as not every polling station is a registration centre.

The slow pace of the voters registration exercise is creating challenges for the working class, marketeers, students , peasant farmers and many people who work with time and deadlines. For workers, they are finding it difficult to get permission from employers nearly every day to go and register as a voter because they failed to be attended to by registration officers the previous day . For marketeers, bus drivers, taxi drivers, small shop owners and street vendors, time is money. They cannot spend the whole day or many days queueing up to get a voters card . How will they feed their children after losing the day’s income?

For peasant farmers, the rains have come and are finding it difficult to miss days in the field to get a voters card.For students, most of them turned up to get voters cards outside the schooling hours at the weekend. If they miss getting the voters cards at the weekend, what time do they have during the working days to get voters cards?

It is really mind boggling that the ECZ could plan to conduct the voters registration exercise and purchase malfunctioning machines to undertake the exercise without testing them. Who authorised the purchase of these faulty machines? Why were the machines not tested before being deployed in the field?

I received a call from Zambezi District in the North Western Province that the ECZ had run out of ink after only registering 35 voters on the first day of the exercise. How did the ECZ dispatch officers from Lusaka to Zambezi, a distance of 1,200 kilometres which is almost the same distance from Lusaka to Johannesburg, with ink to last one day when they knew that the officers will be out for 30 days? The situation where ink and other materials are running out is not peculiar to Zambezi. It is widespread. How and why?

We have also received reports of the exercise being disrupted by Zesco load shedding despite ECZ buying gensets. Is it true that the gensets procured by ECZ were faulty?

In order to mitigate the slow pace of the exercise, the ECZ decided to extend the registration time into the night. These are desperate measures. The ideal situation was to extend the period of registration for people to register properly during day time. During the night, a lot of things happen. People living in the compounds are finding it difficult to book taxis due to lack of public transport in the night. Security is also a problem in the night. In any case, if it is already a problem to monitor the voters registration exercise during the day, what about during the night?

The voters registration exercise was a grand scheme designed to assist the ruling party to win the 2021 election. Although the planning appeared to fit in the scheme of things, the implementation has boomeranged. Like many other evil schemes we have witnessed in Zambia, the chaotic voters registration exercise will fail to achieve its intended objectives. We saw the ruling party pushing very hard for the Constitutional ( Amendment) Bill 10. It flopped in Parliament. We witnessed the gassing of citizens which some evil people wanted to implicate the UPND in order to arrest its leaders. The gassing scheme withered away without any arrests of the gassers and without any explanation from the government. We saw the setting ablaze of markets to try to implicate the UPND and its leaders. The matter has been hashed up with no explanation from government.
Similarly, we are seeing the chaotic voters registration exercise being implemented in order to disadvantage the opposition. We are praying very hard that the evil plan “goes back to the sender”.

We would like to appeal to all well meaning Zambians to die a little and obtain a voters registration card. For all the sweating under the hot weather, for all the hunger and thirst experienced in long queues at registration centres and for all the inconvenience caused to the voters , someone has to be taught a lesson for taking the people for granted.

For all the poverty the PF government has subjected Zambians to; for all the corruption and plunder of the country’s resources; for all the unemployment the young people are subjected to; for all the deaths Zambians are experiencing due to poor health services; for all the poor education polices resulting in children not going to school and for all the hunger arising from failure by people to put food on the table, the PF must go.