By Amb. Emmanuel Mwamba
I am a strong advocate of cultivating a culture of celebrating our heroes.
But I have also noted that in the process, we have developed a habit of giving credit incorrectly or unfairly.
This takes other deserving persons into obscurity, their efforts and sacrifices buried and leaves the country with a distorted history.
We then proceed to apportion praise and excess adulation to individual(s).
Take for example Zambia’s national independence, by now you must know that there were many hands on deck beyond Dr. Kenneth Kaunda.
Many remain unrecorded and those that made numerous sacrifices and paid with their lives, their stories sink into oblivion.
Similarly, when the biggest debt relief was obtained in Zambia, the role of such entities such as the Catholic Church, civil society groupings, and other individuals have been lost in the narrative but only names of one or two individuals are unfairly bandied around as architects and achievers, of Zambia’s debt relief in 2005.
THE BRIEF STORY TO DEBT RELIEF
By 1991, Zambia was reeling with a historical and unsustainable public foreign debt of $7billion under a small economy with a GDP of $900million.
By 1996, the determined effort to repay the debt were bearing but little fruits.
The debt had been reduced to $6.5billion.
At this stage the economy was recovering and was growing with a healthy GDP of $3.9 billion.
But the stock of the foreign debt for poor countries was a source of great worry to the world.
After extensive lobbying by non-governmental organizations(NGOs) and the Catholic Church under the umbrella lobbying group called Jubilee 2000, both the International Monetary Fund(IMF) and World Bank were forced to respond and launch a programme of debt relief for the world’s poorest nations.
The Heavily Indebted Poor Countries (HIPC) Initiative was launched in 1996 in response to this noble public pressure from civil society.
The HIPC Initiative aimed to ensure that poor countries that faced unsustainable debt were eligible for debt relief.
It targeted countries with high levels of poverty and debt overhang as immediate beneficiaries.
Zambia was among the first 39 poor countries listed as eligible.
However this was to be done on condition that the national governments of these countries met a range of economic management and performance targets.
The progam linked debt relief to poverty reduction, and good social policies.
Zambia joined this programme.
Zambia needed to show that its people were affected by
widespread poverty, demonstrate that its external debt stock was unsustainable and also show the progress it had made in transforming the country through the implementation of economic reforms.
There were two stages to complete the programme before debt cancellation could be implemented.
These were:
“The Decision Point” and “The Completion Point”.
TO REACH HIPC INITIATIVE DECISION POINT
Zambia had to start a programme with both the IMF and the World Bank.
Zambia had to have a running programme that qualified and made it eligible to borrow from the World Bank’s International Development Agency(IDA), which provides interest-free loans and grants to the world’s poorest countries, and from the IMF’s Poverty Reduction and Growth Trust, which provides loans to low-income countries at subsidized rates.
With luck, Zambia already had an established track record of reform and policies with both the IMF and the World Bank–supported programs that started in 1992.
ZAMBIA QUALIFIES FOR THE DECISION POINT IN 2000
After a two year program from 1998-2000, Zambia reached and qualified for the HIPC Decision Point.
At the Decision Point in the year 2000, Zambia obtained immediate debt relief of $2.5billion in net present value terms and its public debt stock was reduced by a whopping 62%.
At Decision Point, Zambia obtained assistance from the IMF and IDA of $602million and $452million respectively.
Zambia also obtained assistance from the AfDB, OPEC-Fund for International Development, European Union and the Paris Club Creditors.
Zambia and other poor countries were boosted by the launch of the Millenium Development Goals.
In the year 2000, the United Nations held the Millennium Summit which launched a 15 year program of development targets dubbed the Millenium Development Goals (MDGs).
ZAMBIA REACHES HIPC INITIATIVE COMPLETION POINT IN 2005
In order for Zambia to achieve full debt cancellation, the HIPC Initiative defined the set of conditions for Zambia needed to reach the Completion Point.
If conditions were met the debt relief committed at the Decision Point in 2000, would become irrevocable.
To reach the Completion Point, Zambia needed to implement a full programme under the Poverty Reduction Strategy Paper (PRSP) designed under the MDGs.
The Poverty Reduction Strategy Papers (PRSP) were prepared by member countries through a participatory process involving domestic stakeholders as well as external development partners, including the World Bank and International Monetary Fund and
intended to help aid recipient countries meet the (MDGs).
This involved the promotion of growth, enhancement in the delivery of social services, the fight against HIV/AIDS, gender equality, improved environment and good governance.
Zambia also specifically needed to undertake public expenditure reforms by implementing the Integrated Financial Management Information System (IFMIS), to restructure and privatise both the power utility company, ZESCO and privatise the Zambia National Commercial Bank(ZNCB).
The Zambian government restructured ZESCO, integrated Kariba North Bank under it and prepared to commercialise its generation, transmission and distribution entities.
However Government met strong parliamentary and public resistance when it attempted to unbundle ZESCO in readiness for its privatization.
Further talks to sale 49% shares of ZNCB to South Africa’s banking giant, ABSA running from 2003, failed.
But in March 2005, the staff of the IMF and International Development Association (IDA) recommended that Zambia had satisfactorily fulfilled most of the requirements and conditions for reaching the Completion Point under the Enhanced Initiative for HIPC as approved at Decision Point in the year 2000.
Although at this stage ZESCO and ZNCB were not fully restructured and privatised, and the IFMIS programme was not implemented, the IMF Board was satisfied with the Zambian government’s commitments made to dispose off the public assets and implement reforms in public expenditure.
So the IMF announced on April 1 2005, that Zambia had reached the Completion Point and was eligible for debt cancellation and relief.
Zambia obtained debt relief of over 97% from creditors belonging to the Paris Club and commercial Creditors.
CONCLUSION
So who gets the credits?
It should be both Second President of Zambia, Dr. Frederick Jacob Titus Chiluba and his successor, President Levy Mwanawasa for the leadership and direction during this difficult period.
Others should be Finance Ministers: Ms. Edith Nawakwi, Dr. Katele Kalumba, Mr. Emmanuel Kasonde and Mr. Ngandu Peter Magande.
But remember this was a foreign driven process and the above were mostly inevitable actors in a well choreographed international script and process.
All this was made possible because the Catholic Church, NGOs and other groupings under the the Jubilee 2000 Coalition pushed an aggressive global campaign and lobby for the cancellation of unsustainable foreign debt against poorest nations such as Zambia.
This was to help end global extreme poverty and hunger.
People were at the centre of the initiative and not governments or its officials.