Zambia Reports (Lusaka)

27 July 2014

Zambia: Grading Zambia's Presidents - Frederick Chiluba

analysis

Titus Frederick Chiluba, President of Zambia 1991-2000

The late President Frederick Titus Chiluba became the second republican president of Zambia in 1991. He won the presidency in a massive landslide victory which was the first democratic election held in the country after more than 27 years of Kenneth Kaunda's one-party state.

Chiluba's victory came at time of tremendous change in international affairs. The disruptions that began with Mikhail Gorbachev's 'glastnost' in Russia to Chairman Deng Xiaoping's reforms in China, and the eventual opening up of Eastern Europe led to a number of totalitarian dominoes falling as far away as Africa and Latin America.

In the 1980s, the rallying cry around the world called for democracy and a better life for citizens all over the world, but it also called for economic freedom, including less state involvement in the economy. Even the United Kingdom found itself under pressure to sell off many parastatals in rail transport, utilities, and local government. Margaret Thatcher earned herself the title of "Iron Lady" for selling all the public utility companies, most of them purchased by foreigners.

It took a decade for the wind of change to reach Africa. The overthrow of government was mostly in countries that adopted the "one party Rule" and socialist mode of development. Most despots lost elections, and those that resisted met violent revolutions. It is important to note that one socialist by the name of Julius Nyerere of Tanzania humbly stepped down and admitted taking the country on a wrong economic path which led his countrymen ending up in poverty.

MMD Inherits a Sick Country

Chiluba's inauguration speech resonated with the public attitude at the time:

"How great is one's belief in your fellow citizens, your friends and neighbors, when you realize that the stream of democracy - damned up for 27 years - is finally free to run its course as a mighty African river. Not because of arms, not because of bullets, not because of any other time, but the patience of Zambia with corruption, repression, and dictatorship had run out. The voice of the Zambian people, weak as it was at one stage, faint against the thunder of one party and one man, is once again strong, a roar asserting itself. But let us not forget, that we cannot replace the tyranny of an elite with the tyranny of the many. (... )

The economic ills we suffer have come upon us over several decades. They will not go away in days, weeks or months. But we are determined that they will go away. They will go away because we as Zambians have the will to apply ourselves to do whatever needs to done to rebuild this glorious country.

In this present crisis, government alone is not the solution to our problems. For too long, government was the problem. This crisis needs discipline, hard work, honesty, clean government and a determination to grit our teeth, to look our problems squarely in the face, and to tackle them head on."

Chiluba's grim assessment of the economy was correct. Inflation had reached dizzying heights of some 400%. More than 70% of the state budget was sourced from foreign donors. Agriculture production was plummeting, with particularly low maize outputs, leading to high food prices and hunger even in good rain seasons. Foreign exchange controls were enforced for any purchase above $1,000, creating rampant corruption in the FX markets, while infrastructure dilapidated and civil servants were years without pay.

Perhaps Kaunda's greatest evil was replacing competent bureaucrats with his party cadres - handing out jobs like payoffs to people had little to no skill to actually perform the work of the state. This failure to separate between state and political party, which many say is taking place once again under the Patriotic Front, created a crisis of governance that even allowed for the unthinkable to happen - cholera outbreaks returned to Zambia after having been eradicating years earlier.

When Chiluba took power, parastatals controlled 80% of the economy, and by 1991 almost all of them were white elephants with empty accounts and useless resources. Corruption and nepotism was rife, and the companies were totally incapable of surviving in market conditions - for example, Zambian Airways consumed 4% of GNP in subsidies, while all the parastatals together only provided for 20% of the state of revenue.

Public security was in a terrible state with police salaries in arrears. The army was spared for obvious reasons. But conditions were so bad that IFA's army trucks became personal to holder cars for senior army personal, resulting in a terrible loss of life through numerous car accidents caused by drunk officers. We had 5 fatal crashes by ZAF before the Gabon disaster. In one such incident the crew ran out of fuel and plunged to death with bukabuka fish thrown all over. Then we had a paramilitary police unit whose sole purpose was to show extreme levels of cruelty to civilians. The police did their bit but most were associated with the numerous armed robberies that took place. The special branch was widespread, holding a presence in each province of the country all to suppress free speech.

Society was in disarray, with just one university and an average of 100,000 12 year pupils dropping out at grade seven level. This was the scenario for 27 years. Employment had dropped to an all time low 250,000 whilst population had doubled to 8 million.

Chiluba's Manifesto

MMD had a carefully crafted manifesto which was prepared long before the party won elections in 1991. The MMD "think tank" was led by mostly young Zambian intellectuals and some few positive veterans. The A to Z manifesto was centered on the principles of running a market economy with a small government. "Compete or Wither" was the rallying cry. No more are we going to subsidise people or industries that cannot stand on their feet.

Parastatals are known not survive in a market economy so it was logical to sell them. More than 70 were privatised. Mines were all sold and this went on for over a period of 10 years. The party was focused on carrying out the privatisations without exception and despite complaints.

Overall the concept of privatisation and market economy are intertwined. The end result is promote growth and in the process the benefits of the "multiplier system" that will have far reaching benefits to the people. Perhaps better explained by the statement made by Premier Deng, the architect of the present Chinese economy. Deng said: "It does not matter whether the cat is black or white so long it catches the mice". This inspirational statement had far reaching world wide appeal. Margaret Thatcher, the late prime minister of UK, used the same strategy by selling public utilities to mostly foreigners. Today all the famous British companies are all owned by foreigners. Landrover, MG, MINI, Vauxhaul, Jaguar, etc. But today the UK has some of the fastest economic growth rates in western Europe.

In addition to economic reconstruction, the MMD government introduced a cash budget to control runaway finances. Price controls in agriculture (maize) were removed. Also subsidies were all removed and fuel liberalised. The mobile ATMs (police road blocks) were all removed. Business licences were simplified, while import controls and foreign exchange controls were removed. Paramilitary police disbanded and the abusive special branch was trimmed. In fact most top special branch operatives just fled the country and ended up in Malawi.

Results of Chiluba's Economic Policy

The immediate positive result came in Agriculture. Zambians responded favourably to the liberalised economy. In the first year of MMD's rule the country recorded a bumper harvest, so much so that the government had to step in to buy excess crops through promissory notes. It is important to note that agriculture related activities constitute 60% of the economy of Zambia. Most of our people reside in rural areas. The mostly held view by SAF that the mines form the largest business entity in Zambia is erroneous. The mines only constitute 12% of Gross national product. Save for one drought year of Chiluba's rule, the country recorded bumper harvests.

Inflation was stabilised to two digit figures and employment doubled to 500,000 by 2000.

Massive infrastructure reconstruction was undertaken in Roads, Schools, transport (importation of new buses), numerous private universities sprung up.

Foreign direct investment flowed in for the first time. And the mines largely benefited and led to an increase in production. With copper prices improving in 2006 the results became more visible.

The government in the second year and for the first time in 27 years balanced the budget. We Zambians started earning enough to pay our own bills .The 70% donor funding was not necessary. What a proud moment for Zambia.

The $7 billion debt that made this country the worst debtor in the world was also paid and some written off after successfully completing a fiscal and monetary sound programme. By the end of 5 years Zambia was removed from the highest indebted nation list of the world.

Style of management

The first ten years the president governed the country in a democratic fashion .All the party presidential elections were free to contest .And at every sitting not less than four presidential candidates contested. He discouraged the worshipping of a leader by dropping such terms as "His excellency".

Perhaps on the economic front the man was excellent. He relied on expert advice and was guided by the articulate MMD manifesto. He never interfered in business decisions and allowed specialisation to take hold. Where Zambians failed he crossed borders and recruited "muzungus" white people to run as BOZ governor and head of ZRA respectively. Chiluba's main interest; the success of the economy.(Today UK has a Canadian governor for the bank of England). Titus was another disciple of premier Deng policies: "It does not matter whether the cat is black or white so long it catches the mice"

The Dark Side of Chiluba... ..

I'm not going to dwell on issues of illegitimacy for obvious reasons but what we know Chiluba was born in Zambia, schooled in the country and was born from a Zambian mother.

What we didn't know was the man. Although he went to great lengths to pretend as a democrat he still harboured dark ambitions. The type one finds in despots.

Chilubas stratagem; all his reign was characterised by the steady expulsion of founding fathers of the MMD party. The reason; any verbal disagreement with the "dear leader" was interpreted as being against the party. And the view of the party was his and his alone. Am Gutted.

Out went big wigs of MMD, Roger Chongwe, Dean Mungomba, Shamawana,Baldwin nkumbula etc. The whip even extended to those who wanted to join the party like the late Anderson mazoka . + Late Mazoka was grotesquely rejected by chiluba to join MMD

This sad development in his character did not come entirely by surprise .Some MMD founding +fathers expressed reservations when he was first asked to come and lead the party at formative stage

On the economic front Chiluba dithered on the privatisation of KCM. Because of his procrastination and the looming KCM losses of $2m dollars per day haemorrhaging on the budget, it was no surprise the company took 2 years after Anglo American had fled in 2003 to be sold. On remaining Parastatals Chiluba unilaterally made a U turn on privatisation; Zesco, Zanaco (Zamtrop) and Zamtel, These unsold companies became the Achilles heel of the economy in the years that followed.

I shall remember him as the man who ushered in democracy and removed it again. His greatest act of betrayal was the expulsion of 79 senior MMD's. Principled Zambians' who objected over his unreasonable attempt for a third term. What was left was a party bereft in integrity and once more exposing this country into the political abyss of dictatorship. Another classic case of Animal Farm.

My grading of President Chiluba Economy 8/10 political 2/10

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