Sunday, November 02, 2008

Zambia Elects New President That Eyes Economic Growth

Financial Times
Reuters Africa

Zambia held presidential elections last week and after an incredibly close vote, Rupiah Banda won the contest. Banda, who was sworn in on Sunday, will serve the remaining three years of President Levy Mwanawasa's term, who died of a stroke in August. Upon being sworn in, Banda vowed to make Zambia a “hub for investment.”

Zambia has long been a copper producing giant, and some 60% of Zambia’s GDP is attributing to copper mining. Foreign direct investment has risen to almost $4 billion this year, but the new leader said “too many Zambians had been left behind.” Banda pledges to diversify his country’s economy so it is not as reliant on the copper industry. Only 60,000 people, in a country of 12 million, work in this industry.

Banda, for the most part, will continue to implement the policies of former president Mwanawasa. Many foreign investors had praised Mwanawasa for his conservative fiscal policies that have helped Zambia’s economy grow at a rate of 5% annually since 2002. On this point, Banda said that he “promise[s] to be an agent of continuity.”

The election was closely contested (Banda won by about 30,000 votes) and the opposition has yet to acknowledge the result. The election, however, monitored by both foreign and local officials, was said to be largely fair and uncorrupt. Aside from some logistical issues, the election process went smoothly and there was little violence reported. This fact is especially important as a stable democracy goes a long way towards giving foreign investors confidence in Zambia.

1) Some experts say that investors will pay a premium for stable African democracies. Will the smooth process Zambia went through pay off in higher investment rates?
2) Will other African nations be able to learn from Zambia and its election process in order to make their own elections better? Or are there other factors that play into Zambia’s success that are not easily replicated?

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