Third term bid will cloud Zambian funding prospects

Significance

A recent IMF mission reported considerable progress towards agreement on a proposed 1.2-billion-dollar rescue package. However, the increasingly authoritarian bent of the Patriotic Front (PF) government is complicating prospects for wider financial assistance. International donors are wary of supporting President Edgar Lungu who stands accused of rigging the 2016 presidential elections, undermining civil society, and interfering with the judiciary to secure a controversial third, five-year term in office.

Impacts

• Without a comprehensive economic recovery plan in place shortly, ratings agency downgrades could take place later this year.
• The removal of popular subsidies on food and electricity is likely to trigger popular protest and result in opposition gains.
• Rising demand for copper in the United States and China may result in a spike in prices, alleviating economic decline.