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Zambian economic gloom likely to worsen

Wednesday, August 28, 2019

Significance

Amid escalating external debt, President Edgar Lungu’s administration recently directed the liquidation of KCM, majority-owned by Vedanta, and is suspected to want to sell these assets to a Chinese state-owned firm. This has compounded international doubts about the ruling Patriotic Front (PF)’s economic strategy.

Impacts

  • Despite the controversy over Vedanta, Zambians have little sympathy for the firm due to a pollution scandal and suspicions of tax avoidance.
  • Recent mining sector upheaval will prompt wider investor concerns over the status of private property rights.
  • Opposition figures face an increasing clampdown by the authorities due to pushback against a contentious constitutional amendment process.
  • Recurring corruption revelations against state institutions and officials will prompt increasing civil society protests.
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