Tuesday, November 17, 2020

(LUSAKA TIMES) The Economist Magazine’s Report About Zambia is a Lie

COMMENT - Full disclosure: the Rothschild barons control The Economist Group which owns The Economist Magazine, was well as De Beers, the world's largest diamond miner and Glencore (1, 2, 3), one of the world's largest mining companies and headquartered in Switzerland. Glencore is a major miner in Zambia. De Beers wants to control the Zimbabwean diamond mines, Chiadza and Marange, which could supply 20% of the world's diamonds every year. Other than controlling the World Bank (12) and IMF, they also "took an early role" in the Eurobonds. Notice how The Economist Magazine selectively waves away the effects of the WEF inspired lockdown or their Eurobond debt, the same way they selectively wave away the effects of economic sanctions (Section 4 C 1 and 2) on the Zimbabwean economy. Their problem is that they cannot attack the neoliberal political class they have been supporting all across Africa because it was profitable for them, and now criticize the disastrous consequences of those neoliberal policies. So they talk about 'dictatorship' and 'human rights'. However only when it's convenient. - MrK

The government blames covid-19. It should look in the mirror

Middle East & Africa
Nov 14th 2020 edition
LUSAKA

In his studio Fumba Chama gets ready to play his new song. Unlike in most Zambian workplaces there is no photograph on the wall of Edgar Lungu, the president since 2015. Looking down instead is a young Kenneth Kaunda, who led Zambia for 27 years after independence from Britain in 1964.

If that is a silent protest, then out of the speakers comes a louder one. In “Coward of the County” Mr Chama raps laconically about Mr Lungu’s failings over—why not?—a sample of the song of the same name by the late Kenny Rogers, a bearded American country star. It is his latest track about how the ruling Patriotic Front (pf) has crushed civic freedoms and crashed the economy. As if to prove his point, the authorities have repeatedly arrested and intimidated Mr Chama, whose stage name is PilAto.

More... (Paywall) 


(LUSAKA TIMES) The Economist Magazine’s Report About Zambia is a Lie
November 16, 2020
BY ISAAC CHIPAMPE

In their 14th November, 2020 edition, The Economist magazine published an opinionated article that at best describes Zambia as a collapsed economy caused by its President’s authoritarian style of leadership and called for neighbouring countries, and the rest of the world to press for regime change.

Now, this is not a new call out because the international media, in tow with the main opposition in Zambia, have been calling for the rest of the world to declare Zambia a pariah state. But it is normal these days for a frustrated opposition to wish a country bad omen as long as that helps in discarding the ruling party from power, patriotism aside.

What is new, however, is the extent to which an internationally recognized and probably authoritative magazine went in demonising President Edgar Lungu. And I assume here that this malicious article was written by the publishers, themselves, and not a correspondent or even one of their reporters because at end, the Magazine does not proffer any disclaimer about the origin of the article but states cheekily that “This article appeared in the Readers Section of the print edition under the headline “Zambia’s descent”.
The online version, however, is a little more blunter with a multi-faceted headline: “The Mugabe model…How to stop Zambia from turning into Zimbabwe…Neighbours and creditors should resist its slide into autocracy and economic collapse.”

And it is in this headline or headlines that one clearly sees the push for regime change. It is obvious that firstly by likening President Lungu to the late Zimbabwean leader, The Economist tries to brand and frame the Zambian President as a dictator, and by doing that they hope Zambia’s bilateral partners would react in a similar way they punished Zimbabwe. But it is also a ploy to force those who hated President Mugabe to shift their focus to President Lungu, that the Zimbabwean leader is no more.
President Mugabe’s nemeses are obviously missing him and now that he is no more they have been looking at which African leader they could calibrate as a dictator. They want to create imaginary authoritarians in Africa because in truth dictators are now in short supply here. The pendulum is moving to them.

In their effort to scandalise and chastise President Lungu and his Government, the magazine tries to portray Zambia as headed for economic destruction and calls for Zambia’s neighbours (who ironically include Zimbabwe, by the way) to embark on a mission to remove President Lungu and his Government from power. Reason?

President Lungu is more dangerous to Zambia’s economy than covid-19;
he scares away investors by seizing mines;
he detains mining bosses;
he fired the Central Bank Governor for resisting to print money;
he arrested opposition leaders before the 2016 elections;
he shut down the main independent newspaper; and
he has arrested Hakainde Hichilema, the main opposition leader, as well as journalists, musicians and other critics.

The Magazine then makes a clarion call:

“Many Zambians worry that their country is sliding into autocracy and economic ruin, like next door Zimbabwe. To stop that slide, the region and the wider world need to start paying attention now, rather than just sending election observers a few weeks before the poll.”

Obviously, The Magazine painstakingly tries to portray President Lungu as an authoritarian they would like him to be, but at the expense of truth. And “truth” is the heart and soul of good journalism which this respected Magazine has foregone. The Economist is being economical with the truth. For what gain? Only them and their Zambian allies would know. The truth is in all the bullets above, the magazine is either lying or spinning facts i.e slanting facts out of context. There is absolutely no need to explain bullet point by bullet point because every Zambian knows that The Economist Magazine is lying. The authors of this article were either deliberately lying, or were lied to by their sources but what is important is that, out of all these lies above, none would persuade a Zambian to frown upon President Lungu. Why? Because Zambians know these are fibs…outright lies! No amount of demagoguery will skew the thinking of Zambians about the President.

Brand him and frame him in whatever way you like, President Lungu is anything but a dictator. He has allowed the Zambian media to criticize him day in day out. More importantly, through the operationalisation of the Independent Broadcasting Authority (IBA), a plethora of vibrant radio and television stations have been born under President Lungu’s administration. This has allowed citizens to hold Government to account on a daily basis. This has also allowed a plurality of voices on air, unlike before when Zambians relied only on the Zambia National Broadcasting Corporation (ZNBC) for information. President Lungu has also allowed his opponents to criticize him, and sometimes intrusively defame him, on a daily basis. President Lungu has allowed civil society to thrive and they are in numbers here, some of them very critical of him and his Government. He has also not tampered with the independence of the Judiciary, legislature, and critical governance agencies like the Anti-Corruption Commission, the Drug Enforcement Commission, and the Electoral Commission of Zambia, to mention but a few.

It is, therefore, a shame that ignorant international media can pick on him to be a dictator when there are dictators not far from their newsrooms. The world must not worry about President Lungu, they must instead worry about the trajectory being taken by the Western media, especially the likes of The Economist and their ilk.

The author is Special Assistant to President Edgar Lungu for Press and Public Relations

Labels: , ,


Read more...

Sunday, November 15, 2020

(YAHOO, BLOOMBERG) Zambia Default Sets Tough Tone for Talks With Bondholders

COMMENT - This is how they re-write history: 
While the coronavirus pandemic added to Zambia’s woes, its debt problems started years earlier. The government borrowed heavily since 2012, ignoring warnings from the IMF of growing debt distress risks. 
Actually that's not what happened. It was the IMF that encouraged the government to borrow Eurobonds instead of collecting a Windfall Tax from the mines.
The mission congratulates the authorities on the successful launch of Zambia’s first Eurobond. The mission also welcomes the decisions the authorities have taken for the use of these funds in 2012 and 2013. Using this commercial financing to finance high priority capital spending including the repayment of a short-term debt to finance roads infrastructure development reflects prudent fiscal management. Source: IMF, 2012 
The 'warnings' only came a few years ago. The government took Eurobond debt instead of a Windfall Tax on the mines, I presume because of some corrupt agreement between the parties. Either way, where they were once owed billions of dollars in taxes, they now owe billions of dollars in Eurobond debt, plus interest. That makes it odious debt, and it should be scrapped. Back in 2012 I blogged: (STICKY) Chikwanda describes advocates of windfall tax as lunatics. - MrK

(YAHOO, BLOOMBERG) Zambia Default Sets Tough Tone for Talks With Bondholders
Matthew Hill and Taonga Clifford Mitimingi
Sat, November 14, 2020, 12:03 PM GMT+1·4 min read

(Bloomberg) --

Zambia is squaring up for a bruising encounter with foreign bondholders after saying it can’t pay interest on one of its Eurobonds, making it Africa’s first sovereign default since the coronavirus pandemic struck.

A refusal by bond investors on Friday to grant debt relief to the government sets the tone for tough restructuring negotiations with a diverse range of creditors from pension funds in Europe to state-owned Chinese banks that Zambia owes almost $12 billion.

“A default could make an orderly and timely restructuring more challenging,” said Samir Gadio, head of Africa strategy at Standard Chartered Bank Plc in London. “A prolonged default may see some investors unwind non-performing bonds,” battering down prices that are already below half of face value, he said.

Holders of Zambia’s $3 billion of Eurobonds rejected a request to suspend interest payments for six months, and the grace period for an overdue $42.5 million coupon lapsed Friday, triggering a default.

That gives holders of all three securities the right to demand immediate repayment. While it’s unlikely they’ll take that route, Zambia could find itself locked out of international capital markets for years while it struggles to reduce its debt load and address fiscal challenges. General elections scheduled for August add another layer of complication.

“I would expect debt-restructuring talks for the Eurobonds to be very difficult and I would expect them to be protracted,” said Phillip Blackwood, adviser to Sydbank, which manages and advises portfolios with Zambia Eurobonds.

The default will make Zambia’s “financial conditions even tighter for a place where financial conditions have already been tight for quite a while,” said Gustavo Medeiros, deputy head of research at Ashmore Group, which holds Zambia’s dollar bonds. Local currency notes already have yields as high as 33%, and the kwacha has lost nearly half of its value against the dollar this year.

Equal Treatment

Zambia couched its request for an interest freeze as part of the Group of 20’s so-called Debt Servicing Standstill Initiative, an agreement between rich nations to suspend interest payments owed to them by poor countries. The government said it was asking all its foreign creditors, including private lenders, for the same relief.

China Development Bank last month agreed to defer interest payments. While that covered a small portion of the debt, it created a precedent that made it difficult to pay bondholders.

“The government is strongly committed to pursue a constructive and very transparent dialog with all its creditors,” Finance Minister Bwalya Ng’andu said Friday, adding that the state had no choice but to build arrears.

No Example

Bondholders, however, were concerned any relief they granted would be used to service debts to Chinese lenders, which account for more than a quarter of Zambia’s external liabilities. They also want more transparency and a credible economic recovery plan, preferably with the International Monetary Fund’s endorsement.

Other governments shouldn’t see Zambia as an example for how to approach debt restructuring, said Simon Quijano-Evans, an economist at Gemcorp Capital in London.

“Zambia can’t be used as a comparison to other countries, simply because it failed to approach the IMF over several years and failed to be transparent,” he said. “Other countries like Angola and Ghana did exactly the opposite and are thus in a much better position than Zambia.”

While the coronavirus pandemic added to Zambia’s woes, its debt problems started years earlier. The government borrowed heavily since 2012, ignoring warnings from the IMF of growing debt distress risks.

Some Eurobond investors, including Blackwood, argue that Zambia’s troubles only emerged in the years after it tapped international markets, and turned to China for funds. The nation sold its first dollar bond in 2012 and the last one in 2015.

“From Eurobond holders’ side, this is not about an unwillingness or otherwise to forgive debt,” he said. “It is clear to Eurobond holders that the debt problems escalated when the bilateral loans accelerated, after the Eurobonds were issued. The nature of those deals quickly caused problems for the country.”

(Updates with investor comment in the seventh paragraph.)

Labels: , , ,


Read more...