New Zambia Leader Faces Economy in Ruin

JAFFET SKAONGA, a farmer in the small village of Lusoke near here, finds survival more difficult with each new day."Life is unbearable," he says with a sigh as he sits on a scrubbed wooden chair under a large mango tree. Mr. Skaonga is married to a daughter of the village headman, Johnny Lusoke, and has six children. They live in a grass and mud-brick hut. Water is carried from a well in the nearly valley. Lusoke village, 34 miles east of the capital, Lusaka, has about 80 inhabitants, all members of the extended Lusoke clan. Life has never been easy. But a 100 percent annual inflation rate, collapsed social services, and a controlled corn price have brought Skaonga to the edge of despair. His plight reflects that of a country that consumes more than it produces and a continent - self-sufficient in food three decades ago - that today imports 55 percent of its wheat. "The problem in Zambia is not a shortage of resources but the way they have been used," says Alex Chikwanda, one of 19 former finance ministers who served under former President Kenneth Kaunda during his 24 years in power. Mr. Kaunda's critics accuse him of willful neglect of the agricultural sector. A combination of drought, war, overpopulation, economic mismanagement, and political repression have taken a heavy toll on such potentially productive African economies as Zambia. According to the United Nations Economic Commission for Africa, one-quarter of Africa's 400 million inhabitants receive less than 80 percent of their daily food needs, while some 29 million are in danger of imminent starvation. In the past five years, there has been a growing trend in Africa toward democratization, the resolution of civil wars, and an acceptance of the need for Western-style economic reform. The inhabitants of Lusoke village subsist by growing corn - the staple food - groundnuts, sweet potatoes, bananas, papayas, and mangoes. They also keep chickens, guinea fowl, and a few goats. But in these harsh economic times, it is not difficult to see why villagers are flocking to urban areas in hope of a better life. Nearly 60 percent of Zambia's 8 million people live in the towns and cities - making it one of the most highly urbanized countries in Africa. In the past, a community like Lusoke was able to earn enough from the sale of surplus crops to supplement its diet of nshima - a thick cornmeal porridge - with cooking oil, salt, and sugar from the local markets. But today the village's collective proceeds amount to a meager 500 Kwacha ($7.00 at the official rate) a month. Now, with inflation rampant, Skaonga is unable to afford to even buy corn seeds and fertilizer. And most of his fields lie uncultivated. On the well-trodden path between the Chongwe primary school and the village, children carry half-bricks to their classroom to use as seats. And Chongwe's local clinic has run out of most medicines. In the hope of a better future, Lusoke's villagers helped vote former trade unionist Frederick Chiluba and the Movement for Multiparty Democracy into power on Oct. 31. "We are hoping that with the new government things might get better," Skaonga says. "Because of the promises they have made we are still hoping that they will keep their word." But he and the villagers of Lusoke understand little about the complexities of Zambia's economic plight or the harsh impact of a strict economic structural adjustment program. The economic reform program, backed by the International Monetary Fund (IMF) and the World Bank, requires Zambia to accept realistic exchange rates, remove corn subsidies, cut state spending, privatize state-run firms, and promote manufactured exports. (But in Zambia corn price increases have a history of sparking food riots.) In return Zambia is told it can look forward to international aid, reduced inflation, a lower budget deficit, revival of exports, and ultimately a stronger, more diverse economy. Copper accounts for more than 90 percent of Zambia's foreign exchange earnings. The country has already mortgaged its entire copper revenue for next year to buy maize from South Africa, and it still faces stocks drying up in about May - two months before the next crop becomes available. The corn subsidy costs Zambia about $400 million a year, or 13 percent of its gross domestic product of $3.5 billion. "Chiluba must remove a substantial part of the [corn] subsidy by the end of this year or the economy is finished," says former finance minister Chikwanda. Kaunda devalued the Kwacha several times against the dollar to its current rate of 76-to-1. He began, but never followed through on, moves toward privatization and removed price controls on everything except corn. The most recent austerity program was suspended in September when the World Bank froze $80 million in aid after the former government defaulted on a $21 million payment to the Bank. Chiluba warned his supporters before the vote that their lot would get worse before it got better, but democracy, he said, was a prerequisite for economic development. Zambia's embrace of democracy - one of the main criteria of Western donors - could make it a prime recipient of aid and hasten the scrapping of some $8 billion in foreign debt. This would enable an early resumption of the IMF program and could help Chiluba soften the program's impact by improving schools and hospitals and assisting peasant farmers such as Skaonga. "The new government has a very limited honeymoon," says Chikwanda. "People have very high expectations." Jaffet Skaonga is one of them.