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  • on 29.09.2013
  • at 12:00 PM
  • by Kevin Hind

Two Years On for Sata: the Success Story and Its Dark Side 0

Economic development or autocratic regression? After two years in government, Zambia’s Patriotic Front (PF) has inspired a double narrative. One side of the story features uncapped leadership ambitionsviolent street politicsbroken promises and a repressed opposition.

The other side shows a blooming economy, with an expanding GDP, increased foreign direct investment, thousands of new jobs and much-needed sector diversification. Both are true.

Unsurprisingly, it was the platinum version which President Michael Sata underlined on September 20 during a speech to inaugurate the 11th National Assembly’s third session, rattling off a by now familiar set of economic indicators. Zambia registered GDP growth of 7.3% in 2012, though it is down to 6% for 2013 thanks to lowered agricultural production. Inflation shrunk to 7% over the summer of 2013. Lending rates have fallen to 16%, down from 20% last year. Furthermore, by the end of June, the government had surpassed its $3 billion foreign direct investment target for the year by over half a billion dollars.

The centrepiece of Sata’s economic record remains the $750 million Eurobond issued last September, a move straight out of Zambian author Dambisa Moyo’s 2009 book Dead Aid. With that first foray into international capital markets, Zambia joined a growing cohort of sub-Saharan African countries drifting away from the concessional loans and aid-based development doctrine promoted by the World Bank and International Monetary Fund.

The Eurobond money is earmarked for energy generation and transmission, road and rail infrastructure, small and medium enterprise development, and health care. Of course, this comes with voices of caution that remember Zambia’s recent history as a Heavily Indebted Poor Country (HIPC). The Treasury says that, in 2013, debt will reach 37% of GDP – not perfect, but much better compared to 200% at the peak of its debt crisis twenty years ago – and that figure is expected to come down when the government rebases GDP next month.

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By Paul CarlucciThink Africa Press

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