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FDI and Edgar’s Mess
The government’s reaction to the purported comments of Hakainde Hichilema, President of the United Party for National Development (UPND) at an investor’s forum in London was bizarre. But whether the government likes it or not, Zambia no longer has the status of a favoured destination for Foreign Direct Investment (FDI) or even trade and that is not because of anything Mr. Hichilema said or was purported to have said.
It is simply that the fundamentals are no longer in place. They are unhinged, the result of the chaotic management of the Patriotic Front (PF) administration. It is wishful thinking and of the most unhelpful kind to insist that it still is. The slide started immediately the PF administration came into office.
The new normal now became unnecessary commissions of inquiry some of which have never reported, whimsical projects, unplanned and unbudgeted for and re-nationalization of some parastatals for no reason. Political violence in which the PF remains the pace-setter is today a fact of political life. Further, the executive under the PF has failed to comply with some lawful judicial orders yet the rule of law is the very foundation of the modern state. Intimidation and deportation of priests and mine company executives were elevated to state policy.
Zambia was ill-fated from the outset and there has been no improvement under the new PF leader Edgar Lungu who can now only insist on things being what they most definitely are not. Under his watch Zambia has simply disappeared from the radar. Sadly, there is so far no indication that he has any ideas about how to get it back on screen apart from impoverishing the people further.
It can’t be enough simply to quote old classifications and status on investment. Most these in any case have nothing to do with the PF but refer to the period of previous administrations. The PF has only created new unbudgeted for districts in a misguided job-creation effort.
Statistics or classifications from the past cannot be the guide. It is the here and now that is important and in Zambia it is bleak. The administration is unable to manage the economy and protect the people from poverty and misery. A country whose currency depreciates by up to 50% in less than one year cannot be a destination for FDI. There is not enough electricity – a real disincentive to investment. Further, few investors will want to put their money down in a country where the macro-economic fundamentals are in such disarray that inflation can jump from 14 to more than 19% in one calendar month!