Name? Hakainde Hichilema
Westphalian identity? Zambian
Age? 60
Why is he in the news? A president that we have yet to hear from here at RAIA, Zambian president Haikande Hichilema, recently held the China-Zambia Trade and Investment Forum in Lusaka. Hichilema met with Chinese representatives and Ambassador Du Xiahui during the forum where government officials and Chinese and Zambian businessmen participated. The President used the event to increase ties between Zambia and China.
Why do we care? Recently, Zambia collected $1.3B from the IMF after defaulting on its outstanding foreign debt totaling around $17.3B. China is the largest creditor to Zambia, which Hichilema inherited when he took office last year. He has attempted to cancel some of the outstanding payments, including now-cancelled $1.6B worth of Chinese loans. Moving towards a relationship with China that empowers domestic Zambian enterprise may be inspirational to others who are enticed by China’s loan policy.
Why should you care? Since Hichilema took office, Zambia has seen its currency strengthen against the dollar and inflation drop. However, as Hichilema accepted the package from the IMF, some experts assert that it will not help the poor as it introduced a VAT and removed fuel subsidies. However, being only a year into his mandate, it will be interesting to see how his further economic policies will play out for the lower and middle class, therefore you should care 2/10.
Who else cares? Last year at the G7 summit, Janet Yellen, the US Secretary of the Treasury, said that IMF loans should not be used to repay China. With China being the largest creditor of Zambia, it is a geostrategic concern for the United States who looks to counter China’s Belt and Road Initiative in developing regions.
Any further comments? Debt concerns in Africa are of course not unique to Zambia. For example during the UNGA, Kenyan President Ruto voiced his concerns over growing African debt from wealthy creditor states.
