Zambia’s Fragile Economy Faces Pummeling From Climate Change
Zambia’s Fragile Economy Faces Pummeling From Climate Change
(Bloomberg) -- When Zambian President Edgar Lungu delivered his annual speech to open parliament on Friday he mentioned climate change 44 times as he tried to deflect some blame for the nation’s growing economic troubles.
The worst drought in nearly four decades in the southwest of the country has caused crop failure and drastically curbed output at the hydropower dams that Africa’s second-biggest copper producer relies on for about 80% of its electricity generation. In the northeast, floods washed away bridges and also damaged crops. The government has halved its 2019 economic expansion forecast to 2%, the lowest level this millennium and less than population growth.
“The inability to have adequate water, generate enough power, grow enough food to feed our people have all been greatly caused by the effects of climate change,” Lungu told lawmakers. “This natural phenomenon is a force majeure.”
Zambia’s economy was already struggling after the government took on billions of dollars in loans to fund an ambitious road-building program and other infrastructure. The nation’s debt will reach 92% of GDP this year, according to the International Monetary Fund, up from 66% in 2017. A decline in copper prices and repeated bigger-than-planned budget deficits have also hurt growth.
The extreme weather this year is making things worse. The southern African nation faces a food deficit of about 355,000 metric tons of equivalent to its staple corn, according to a report by the finance ministry. That contradicts Information Minister Dora Siliya’s assertion that Zambia has enough food stocks to last until the next harvest in 2020.
The government will need more than $100 million to provide aid, including food, to citizens affected by the drought, according to a draft report by the Disaster Management and Mitigation Unit. Agriculture Minister Michael Katambo didn’t answer two calls and two text messages seeking comment.
Inflation accelerated for the fifth straight month in August as a weaker currency and rising food prices pushed up the cost of living. At 9.3%, it’s the highest level since 2016, when another severe drought coupled with government overspending triggered an economic shock. At the time, Lungu also tried to deflect blame, calling for a day of national prayer.
This time, Lungu offered a mea culpa. “Did successive governments prepare adequately for the people of Zambia to face this situation? Did we do enough to put in place early warning systems? Maybe not,” he said. “It is for this reason that my government has not been spared by the adverse effects of climate change.”
To contact the reporters on this story: Matthew Hill in Maputo at mhill58@bloomberg.net;Taonga Clifford Mitimingi in Lusaka at tmitimingi@bloomberg.net
To contact the editors responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net, Hilton Shone, John Viljoen
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