Hakainde Hichilema says his business-friendly policies will sweep him to power in August general elections in Zambia where economic growth almost halved last year.
Since he lost to President Edgar Lungu by less than 28,000 votes a year ago, inflation has soared to the highest in 12 years, mining companies including the local units of Glencore Plc and Vedanta Resources Plc have cut more than 10,000 jobs, while blackouts and falling metal prices have lowered output in Africa’s second-biggest copper producer.
“The economy has collapsed,” Hichilema, the 53-year-old businessman and leader of the United Party for National Development, said in an interview Wednesday at his home in Lusaka, the capital. “Zambians have realized that there’s only one party that has a vision, that has a plan to fix the economy and that’s UPND.”
Zambia is struggling as prices for copper, used in electrical wiring, have plunged to 2009 lows. Power cuts and repeated government overspending have amplified the situation, helping to push the country’s borrowing costs to a record. Yields on Zambia’s $1 billion of bonds due April 2024 fell 5 basis points on Friday to 5.17 percent as of 9:27 a.m. in London, declining from an all-time high. The kwacha has weakened 42 percent against the dollar since the beginning of last year, Africa’s worst performing currency over the period. The economy grew by 3.4 percent in 2015, less than half what the government was targeting.
If he wins the election set for Aug. 11, Hichilema plans to cut government spending and curb borrowing that has about doubled to more than $6.3 billion since the Patriotic Front came into power in 2011. Lungu took over from Michael Sata, who died in 2014. This will be his fifth attempt at winning the presidency since he took over the leadership of the UPND in 2006.
At a time of economic crisis, “having such a person who’s willing to work with investors might be a better sell to Zambians,” Sinethemba Zonke, a political risk analyst at Africa Practice consultancy, said by phone from Johannesburg. “Zambia is one country where we’ve seen an incumbent can be toppled.”
Amos Chanda, Lungu’s spokesman, didn’t answer two calls to his mobile seeking comment and a third didn’t connect.
Lungu this month signed into law constitutional changes that include the requirement that to win elections a candidate must have an outright majority and select a running mate that will become vice president and take over in the event the leader dies. Hichilema said that while he takes no issue with these amendments, the public wanted a new constitution and not just modifications.
Lungu said a costly referendum would be required for a new constitution and resources were scarce.
Hichilema is yet to pick his running mate, he said. He’s willing to form political alliances ahead of the vote with individuals or groups “who want to see the economy improved, poverty reduction, who want to see jobs created.”
The economic problems faced by residents in the copperbelt region and the power cuts and prices increases in the capital have fueled public discontent and may help Hichilema win the presidential vote, Eurasia Group, a Washington-based research and consulting firm, said last month in an e-mailed note.
Hichilema said his plan includes focusing on expanding the energy and agricultural industries by encouraging private investment, cutting red tape and ensuring policy predictability. The country has faced “unprecedented policy instability” over the past four years, he said, pointing to a mining tax regime that has changed at least three times over the period.
“The economy, I think, will be number one,” said Hichilema, who has business interests in ranching, property, health care, tourism and financial services. “Our focus for UPND and for me as a candidate seeking public office at that level is to achieve an economic turnaround.”
Hichilema said his government would talk to mining companies to draft policies that keep operations viable while ensuring they contribute fairly to government revenues, he said.
Attracting both local and foreign investment will be key as “you can’t have jobs without investment; you can’t turn around your economy without investors,” he said.
On the spending side, Hichilema aims to “ruthlessly cut excess fat, extravagance,” he said. His focus here will be on the size of government, travel and corruption in procurement. Where Lungu chartered a jet to the UN General Assembly last year, Hichilema pledges to only fly commercial aircraft.
Overspending and falling copper prices helped push Zambia’s budget deficit from the targeted 4.6 percent of GDP to 6.9 percent, Finance Minister Alexander Chikwanda said in October.
The ruling Patriotic Front “came with populism,” said Hichilema, also known as HH. “Zambians have now come to understand that you cannot eat populism.”