Zambia's Debt, Political Crisis Casts Shadow On Future

"The government went on a borrowing spree over the last few years and was then unable to repay," notes Peter Leon, co-chair of the Africa group at the law firm Herbert Smith Freehills. This comes after Zambia called on the International Monetary Fund for a bailout and President Edgar Lungu's government hastily knocked together an Economic Recovery Programme in December to try to convince the IMF about its seriousness. But Leon suggests the plan is more words than substance and isn't credible. Presidential elections will be held in August 2021, the sixth attempt by opposition leader Hakainde Hichilema to win the presidency. Meanwhile, fears are growing that this year's campaign could become more violent than usual. In December riot police shot dead two opposition supporters demonstrating outside Lusaka police headquarters. Low-income countries have been especially hard hit by the economic downturn caused by the Covid-19 pandemic, leading to more people needing assistance for their basic needs. This means that governments are hard pressed to find new sources of funding and even to service existing debts.

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