Africa’s second-biggest copper producer, Zambia, is buckling under billions of dollars in debt, and its new President has a plan to get out from underneath it: stop borrowing so much, and mine harder.
Hakainde Hichilema was elected last month—a triumph that followed five failed attempts at the presidency, and a 2017 spell behind bars for “treason” after the tycoon failed to give way to the motorcade of now–former President Edgar Lungu.
The new President entered office with the task of finding out just how much debt the country has. With its GDP shrinking nearly 5% in 2020, Zambia last year became the first African country to default during the pandemic. This was partly owing to depressed copper prices in recent years, which made debt-servicing harder, but it was also a function of Zambia’s level of borrowing under China’s Belt and Road infrastructure initiative. Zambia’s debt pile is officially $12.7 billion, with around 30% of its external debt being owed to China, but Hichilema and others suspect it’s actually bigger.
Climbing out from under that pile will require restructuring, which will in turn require transparency about the size of the problem, plus a degree of goodwill: Analysts expect to see lenders agreeing to widespread haircuts. But the effort would be greatly aided by the “accelerated economic recovery” that Hichilema, whose liberal party is called the United Party for National Development, is promising.
“Our administration commits itself to immediately stop...
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