By Kapya Kaoma
It is said, “Lie to me once, shame upon you. Lie to me twice, shame upon me.” So when I read Fumba Chama A.K.A. Pilato’s case why the Central Bank Governor should not raise the fuel and electricity tariffs or remove subsidies, I wondered if he knew the many issues involved. President Hichilema knows removing subsidies, increasing electricity prices and worse still closing INDENI, is politically imprudent–so why even entertain it? Didn’t Bally promise to reduce the pump price to K5 once in office? Ok. Give it to him-he was joking or simply lying. Removing subsidies and tariffs on fuel, electricity and closing INDENI would raise prices of everything in the nation–so why do it?
Bally has no choice; as a conduit of the Bretton Woods institutions (the IMF and World Bank), he must do whatever they demand if his Regime’s line of credit has to remain open. That’s capitalism–the one who pays determines the rules.
In “Raised Hopes, Shattered Dreams,” I document Zambia’s interactions with the IMF/World Bank since the KK regime. In the 1980s, KK cut links with these institutions specifically for demanding that his administration should remove subsidies on many products including mealie meal as conditions for Aid. When KK tried it, people responded with riots. He then reversed his move, introducing free mealie meal coupons and cut links with the World Bank and IMF.
Three decades ago, we were victims of these vultures because of another egocentric president. We didn’t learn much. The Chiluba regime followed every dictate of Bretton Woods, sold hundreds of national companies, underfunded education, the health sector, public infrastructures including sanitation and waste collection, reduced the Civil Service, froze wages, and removed all subsidies. The term for this situation is “the shock”–pointing to socioeconomic destabilization these abrupt changes cause in people’s daily lives. Naomi Klein’s “The Shock Doctrine,” however, makes the case that this is a grand oppressive scheme through which unpopular free market decisions are imposed against the wishes of local people to the benefits of those who control the corridors of power––the grand international corporations, and the politicians. In Zambia, despite putting hundreds of companies under receivership, and hundreds of thousands of workers losing their jobs, the benefits were only felt by a minority among them Chiluba, politicians and our current President. The majority remained poor.
African Presidents have rejected the IMF and World Bank neocolonial economic imperialism for a reason–their conditions only apply to Africa but not to the West. I am afraid President HH is following the footsteps of Chiluba. Chiluba’s arrogance and ignorance misrepresented KK’s misgivings about the Bretton Woods cartel as purely corruption related. Thus when he restarted the negotiations with the IMF and the World Bank, he bought into everything they told him. So is President Hichilema. He is married to the IMF, the World Bank and Western Donors–it feels great to take pictures with white people, and to sign deals. But the devil is in the details to which most Zambians are not privileged. This is how the closing of, or receivership of INDENI, removal of subsidies and tariffs come in. Zambia must raise revenue and save as much as possible to improve its fiscal impact on creditors. Lungu wouldn’t have done this in the election year–he needed to win. Neither could he appear to freeze Civil Servants’ salaries–something that led to minimal raises and debt swabs. These steps were deal breakers with the IMF and World Bank. Can HH do it without violating the promises he made to Zambians? Freezing Civil servants salaries he did without problems. But can he remove subsidies and raise the price of fuel and electricity and close INDENI without offending his supporters? Kaya!
The New Dark Regime SHOULD NOT REMOVE subsidies on Electricity, Fuel, and close INDENI if it wants to grow the economy. These products affect every aspect of the economy. Western governments have provided subsidies to critical industries and services, and in some cases cash to citizens to revitalize the economy.
During the COVID pandemic, for example, Western governments poured countless amounts in their economies, and are still doing so. The U.S. Congress just passed the biggest Bill in trillions–most of it dedicated to social services such as childcare, health, education, and electric cars. This is in addition to another bipartisan Bill amounting almost a trillion. So why should Zambia be dropping them when the US is expanding them? The New Dark Regime will surely fix many households–the good news is, it will be in darkness so they won’t see.
I saw it here at Lusaka Times on June 20, 2021: “We may shout “Bally will fix it” to mean “Bally will fix us.”