By Eugene Makai
The date Tuesday, 4th December, 1990 was a landmark in determining the future of Zambian political and economic management.
The President, Dr. Kenneth David Kaunda under political and economic pressure signed a presidential decree ending the One Party state in which his United National Independence Party (UNIP) had ruled unchallenged since 8th December 1972.
The opening up of the political space in late 1990 saw the birth of the Movement for Multiparty Democracy (MMD) as the strongest of the new opposition political parties which included the National Democratic Alliance (NDA), National Democratic Party (NDP) and the Democratic Party (DP).
With the first multi-party elections in more than18 years slated for 31st October, 1991 the ruling UNIP was under pressure to sell a revised economic recovery plan to the people of Zambia at a time when Dr. Kaunda’s government was facing popular dissatisfaction that led to 3 days of rioting in late June, 1990 leaving at least 24 people dead and 150 people injured.
The riots, a result of price increases of essential commodities particularly that of the staple mealie-meal whose price immediately more than doubled, were accompanied by looting and also unrest at the University of Zambia (UNZA) the country’s highest learning institution, where students called for the resignation of Dr. Kaunda.
UNIP now under the burden of a US$7 Billion external debt was under pressure from multilateral lenders and had lifted price controls on what was an embarkation to a market economy.
Two months earlier from 9th-11th April, 1990, Zambia’s Minister of Finance and National Commission for Development Planning, Gibson G. Chigaga, headed a delegation to Paris to a meeting at the World Bank’s European Office in Paris with the CONSULTATIVE GROUP for Zambia which included the World Bank, IMF.
Participants included delegations from Canada, Denmark, Finland, France, the Federal Republic of Germany, Ireland, Italy, Japan, the Netherlands,Norway, Sweden, Switzerland, the United Kingdom, the United States, the African Development Bank, the Commission of the European Communities, the European Investment Bank, the International Monetary Fund, the OPEC Fund for International Development, the United Nations Children’s Fund, and the United Nations Development Program.
Observers from the Arab Bank for Economic Development in Africa, the Food and Agricultural Organization,and the Organization for Economic Cooperation and Development also attended the meeting.
DÉJÀ VU
Zambia was back at the table with multilateral lending institutions after famously abandoning the IMF on 1st May, 1987 with President Kaunda’s famous words:
”Zambia has not abandoned the restructuring program. That program will continue, but not on the lines of the I.M.F., which were too demanding on the economy.
”It was our genuine desire to work with the I.M.F. and World Bank, and we did so honestly, but it reached a stage where the programs headed by the I.M.F. became completely unbearable.”
Dr Kaunda had rejected the I.M.F.’s conditions for a new financing package of about US$300 million, which Zambia would access after it paid off debts to the fund estimated at US$230 million.
He ended the foreign exchange auctioning system, established a new fixed rate of eight kwacha (K8) to the United States dollar, restricted payments on the foreign debt, which had been consuming 40% of export earnings, to under 10 percent and said Zambia’s scant foreign exchange would be used for necessities such as fuel imports, fertilizer and equipment vital for the mining industry.
PART THREE FOLLOWS…..
