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Last Updated: Wednesday, 29 June, 2005, 06:01 GMT 07:01 UK
Zambia's legacy of liberalisation
By Mark Doyle
BBC world affairs correspondent in Mazabuka, Zambia

Zambia's capital Lusaka has a thriving business district
This medium-sized settlement, just west of Lusaka, looks like a standard African market town as you approach it on the road.

Small shops, restaurants and ubiquitous adverts for mobile phone networks line the main street, while people bustle about making ends meet.

It all looks ordinary and typically African - until you look into the distance and realise that at the end of the main street is an enormous modern building that completely dominates the vista.

It is a South African-owned supermarket, and, the size of an aircraft hangar, it completely dwarves everything around it.

While staying in the capital Lusaka I had got used to the sight of South African-owned shopping malls. Together with the cleanly-swept streets, they gave Lusaka - a city that must surely be one of the cleanest capitals in Africa - an impression of modernity and progress.

However, that was the capital. I was surprised to see that South Africans had begun to dominate the rural retail trade even here Mazabuka.


It is an indication of how deep the influence of liberalisation has reached in Zambia, a country that has undergone an eastern-European style transformation to free market ideals.

The reforms began in 1991, when former President Frederick Chiluba swept 'Father of the Nation' Kenneth Kaunda out of power and started turning his "humanist" - read, broadly, socialist - policies on their heads.

The impact of those reforms is still being felt, and since President Chiluba was levered out of power in 2001 under a cloud of corruption charges - some relating to the mass privatisations that followed his arrival in power - Zambians have been debating the pros and cons of the free market.

Pre-Chiluba, the Zambian government owned about 300 large and smaller scale enterprises, from huge copper mines to agricultural cooperatives, and even butcher's shops.

"These companies were losing hundreds of millions of dollars a year," an international banker in Lusaka told BBC World Service's Assignment programme.

"They had to go - it was either privatise or see them all collapse completely."

All but a handful of these firms have now been privatised and, in the wave of liberalisation, many import tariffs which used to protect Zambian industry from outside competition have also been swept away.

The result has been some inward investment - such as the South African supermarkets - but also complaints about widespread unemployment.

Cheap imports

For example, the indigenous textile industry has collapsed under the weight of cheap imports from Asia and the trade in second-hand clothes from Europe.

I met British-born textile entrepreneur Chris Glover at his factory in Livingstone, southern Zambia, while ancient shuttle-and-loom weaving machines created an infernal din turning out acrylic blankets.

Children stand outside a Zambian copper mine
Much of Zambia's formerly state-owned industry is now privatised
Glover agreed, over the racket, that his was a dying industry - "unless the government can protect it from cheap imports".

However, since many of the imports come from China - which supplies considerable aid to the Zambian government in other spheres - a crackdown on the imports is difficult to imagine.

"It's unlikely," Mr Glover agreed. "The Chinese are doing good work for Zambia on the roads and airports."

Zambian trade unionist Joyce Nonde has seen membership of her financial-sector union fall from 12,000 to just 3,000.

She accepts that some privatisations were inevitable, but said, "there was also asset stripping and political interference by the government of the day".

By "interference," Ms Nonde explained, she meant corruption.

The international banker, who requested anonymity, agreed with Ms Nonde, saying that there was a "lack of transparency under Chiluba" - who was replaced by Levy Mwanawasa.

Ms Nonde is now fighting against the privatisation of one of the last national banks to remain in government hands.

She argues that without government control of parts of the financial sector rural areas will end up without any access to the money markets.


Everyone I spoke to in Zambia said unemployment had increased as a result of liberalisation and privatisation measures introduced after 1991.

"Prospects are bleak," said a woman student wearing a graduation gown as she headed for the lawns of the University of Zambia.

"There are hardly any jobs. It's all those privatisations."

But the international banker, who saw the liberalisation measures as "inevitable and unavoidable," said Zambia's economic problems pre-dated 1991.

Frederick Chiluba
Former president Frederick Chiluba began the reform process
"There was a sharp decline in average per capita income from the 1980s onwards - from $900 to $300," he said.

"But at least for the past few years the decline has been stopped and now economic growth is beginning to kick in, despite the current drought."

While life is hard for the urban unemployed here, it is arguably even worse for small-scale farmers who make up the majority of Zambians.

Maize is the staple food of the country - it is pounded to make a tasty porridge, Nshima - and until 1991 farmers were subsidised to produce it, ensuring a steady supply to the towns and cities.

Those subsidies - on fertilizers and other inputs, as well as guaranteed cheap loans - made farmers relatively well off. All that has now changed, however, and the subsidies have been cut.

When I visited a small farming community outside the town of Choma there were heartfelt complaints about the lack of water caused by the current drought, but also about the lack of investment in rural areas.

The farmers I met showed me numerous deep wells they had tried to dig.

Most of them had yielded nothing and the farmers were relying on little more than dirty holes in the ground from which brackish liquid occasionally seeped for drinking water and to irrigate their crops.

A full report on Zambia's liberalisation will be broadcast on BBC World Service's Assignment programme on 7 July at 0805 GMT.

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