Zambia was already a case study in how not to run an economy

“I FEEL YOUR PAIN,” said Edgar Lungu in a televised address on April 24th. The president of Zambia claimed that covid-19 had “thrown into disarray” the country’s finances. He mused about whether the government could afford to pay for pensions, civil-service salaries and medicine. “Where will the money come from?”

It is a good question. Zambia is arguably the developing country facing the biggest debt crisis in the era of covid-19 (see article). Nearly half of its tax revenues go towards debt service; add the public wage bill and there is little left. In 2019 its budget deficit was 10.9% of GDP. Investors are now pricing its sovereign bonds for default. Though the pandemic has worsened these problems, it did not cause them. Rather, it is Mr Lungu’s profligate politics that have weakened Zambia.

Before his party, the Patriotic Front (PF), took power in 2011, Zambia’s economy was doing rather well. Over the previous two decades the Movement for Multi-party Democracy (MMD) had unpicked the one-party socialism of Kenneth Kaunda, Zambia’s founding president. Copper mines, which generate 75% of the country’s exports, were privatised before the commodity boom of the 2000s. After Zambia was forgiven some loans, its debt as a share of GDP fell from 104% in 2005...

Read More