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Mobilising Natural Resources for Sustainable Development: Copper mining and path dependence in Zambia

Mobilização de recursos naturais para o desenvolvimento sustentável: Exploração de cobre e dependência de trajetória na Zâmbia
Ndangwa Noyoo
p. 119-144

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Este artigo analisa o papel da exploração de cobre na Zâmbia e examina a excessiva dependência do país em relação a este minério, que é ainda o seu principal produto de exportação. Apesar de esta indústria ser um constructo colonial, ela permanece praticamente inalterada, com atores estrangeiros beneficiando largamente dela em detrimento dos zambianos, especialmente a classe trabalhadora e as pessoas vulneráveis. Devido à dependência da trajetória, as perspetivas de desenvolvimento da Zâmbia continuam presas a um tipo de desenvolvimento assente numa “economia de enclave”. O artigo defende uma via de desenvolvimento alternativa que rompe com a que foi inicialmente estabelecida pelos colonialistas e apela a que os papéis preeminentes sejam desempenhados por atores locais no sector de exploração do cobre.

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1This paper discusses the mobilisation of Zambia’s main mineral resource, copper, for sustainable development purposes. It seeks to shed light on the complexities surrounding this issue and proffer a number of appropriate solutions. The objectives of this essay are twofold. First, the paper critically analyses the mobilisation of natural resources in the context of copper production in Zambia, which is basically located in the extractive industry sector. The article links the discovery and eventual exploitation of copper to the politics of colonialism and settler domination on the one hand, and the economics of the former system, on the other. It also examines the development model which colonial rule bequeathed Zambia at independence, which was based on the exploitation of cheap African labour and over-reliance on minerals, especially copper (Coleman, 1971; Turok, 1989, 1991). This is the development model that Zambia inherited and tried to change in order to effectively respond to the needs of an independent and post-colonial society. However, it can be argued that not much has changed as regards this colonial development paradigm. Not only is Zambia highly dependent on copper for its sustainable development objectives, this industry continues to be overwhelmingly shaped by external forces (Gertzel et al., 1984). In this regard, the means of production, as they relate to the mining of copper in particular, are still controlled by foreigners. This situation has occurred despite the Zambian Government’s past efforts and valiant attempts at times, to nationalise the country’s mines and other facets of the economy.

2The second objective of the paper hinges on a suggested new development pathway which should focus on empowering local actors. Due to the political and economic continuities associated with copper mining, this paper has chosen the political economy framework to guide its analysis (Bueno de Mesquita, 2016). It also uses the prism of path dependence to decipher the reason(s) why copper mining – which is mainly driven by foreign businesses and instead of local actors – continues to define Zambia’s social and economic prospects 56 years after independence (Noyoo, 2021; Sikamo et al., 2016). The paper argues that Zambia’s political economy is defined and reinforced by copper mining and vice versa. In applying the political economy approach as the discussion’s theoretical framework, the paper can be characterised as a study and a type of investigation. Political economy, which may be viewed as an object of study, is associated with shifting concentration of attention between different aspects of the interface between the economy and the polity (Cardinale & Scazzieri, 2018). The mutual relationship between the economy and polity is deeply rooted in the collective dimension of the provision and utilisation of material resources (Cardinale & Scazzieri, 2018). Another concept that is central to this discussion is path dependence (Mahoney, 2006).

3According to Kay (2006), the concept of path dependence has been used in political science almost exclusively within a broad institutionalist framework. The widespread and cross-disciplinary use of path dependence for the analysis of institutional ‘stickiness’ makes the concept an obvious starting-point for the examination of concepts, metaphors, and theories that may be used to structure narratives of policy dynamics. Furthermore, Kay (2006) notes that a process is dependent if initial moves in one direction elicit further moves in that same direction. In other words, the order in which things happen affects how they happen: the trajectory of change up to a certain point constrains the trajectory after that point. This summation reminds us of the various endeavours which were attempted, especially by Zambia’s first African government which tried to wean Zambia off copper. But it unwittingly reinforced the country’s dependence on copper mining. For example, the Import Substitution Industrialisation Strategy that was pursued in the 1960s and 70s could not effectively materialise as it was dependent on revenues from copper (Turok, 1991). Once production and revenues from this industry plummeted, the Import Substitution Industrialisation Strategy collapsed. In the same vein, the country’s comprehensive social welfare system that was in place in the 1960s and 70s, which mainly hinged on high quality universal education and health care, imploded. Unfortunately, it was also dependent on finances accrued from copper sales. Once copper prices tumbled, the welfare sector and universal coverage also dissipated (Turok, 1989, 1991).

4Another methodological consideration of the paper relates to the notion of mobilising natural resources for sustainable development in Zambia. Again, in this regard, copper has been the main resource that all political administrations in Zambia’s post-colonial era have relied on to foster the country’s sustainable development. To date, copper remains Zambia’s main export. This seems to point to the fact that path dependence strengthens the economic straight-jacket that has enveloped Zambia from the colonial period to present times. Following Chowdhury (2018), the term ‘mobilising’ suggests that resources are available, but that they somehow are either (a) not collected fully, or (2) not being used for development due to specific obstacles or a lack of incentives. This study opts for a holistic approach rather than a sectoral focus. Thus, even though it is examining one mineral resource, namely copper, it is cognisant of other natural resources in the country – water, land, forests, wildlife, biodiversity, atmosphere, and minerals. Therefore, it is important to have a perspective that is based on an integrated view of natural resource management for ecological integrity and human well-being – in a country that is experiencing rapid change and uncertainty (Sanginga et al., 2010).

5It is crucial to bear in mind that despite the fact that Zambia has huge deposits of copper, this resource has not effectively been translated into improved human well-being, especially during the liberalisation period, after 1991. It should be noted that historical forces play a key role in determining the central place that the mining industry has continued to occupy in Zambia. Hence, the next section contextualises and illuminates the context of the paper.

The context

Figure 1: Map adapted from Zambia Tourism

Figure 1: Map adapted from Zambia Tourism

Source: https://www.zambiatourism.com/​about-zambia/​geography/​

6Zambia is a landlocked country in southern Africa that shares borders with eight countries, namely Angola in the west, Botswana to the south, the Democratic Republic of the Congo (DRC) to the north-west, Malawi in the east, Namibia to the south-west, Tanzania to the north-east, and Zimbabwe to the south. The capital city Lusaka, is located in the south-central part of the country. Zambia’s landmass is 752,618 km2. It is estimated that Zambia has approximately 40 per cent of southern Africa’s fresh water resources. Approximately 33,500 km2 of the country is arable land, while most of it is a high plateau. Zambia is a member of the Southern African Development Community (SADC) and is part of the Commonwealth group of nations. According to the Central Statistical Office (CSO, 2018, p. 7), Zambia has a population of 16,405,229 and has abundant natural resources with five main rivers, namely: Zambezi, Kafue, Luangwa, Luapula and Chambeshi. In addition to these rivers, the country has major lakes such as Tanganyika, Mweru, Mweru Wa Ntipa, Bangweulu, including the human-made lakes of Kariba and Itezhi Tezhi. A major tourist feature in the southern part of the country is the Victoria Falls / Mosi-oa-Tunya, which is one of the Seven Wonders of the World. Zambia has wildlife and game reserves affording the country with abundant tourism potential for earning foreign exchange. The Luangwa and Kafue National Parks have one of the most prolific animal populations in Africa. The country is also endowed with various minerals and precious stones such as copper, emeralds, zinc, lead and cobalt (CSO, 2018).

  • 1 At the time of writing this article, Edgar Chagwa Lungu was still the president of Zambia. However, (...)

7Currently, Zambia is governed by the Patriotic Front (PF)-led government headed by Edgar Chagwa Lungu.1 Lungu took over from the founding president of the PF, Michael Chilufya Sata, in 2015, who was elected on a populist ticket in 2011. Sata passed away in 2014. To say the least, Sata’s policies were disastrous and triggered an economic downturn, after the economy had been on a positive growth trajectory for almost a decade (Noyoo, 2013). This growth was attained during the reign of the late president of Zambia, Levy Mwanawasa. Under Mwanawasa’s rule, the country’s economy performed very well; its socio-economic indicators were on an upward trajectory. After Mwanawasa passed away in 2008, Rupiah Banda of the then ruling Movement for Multi-party Democracy (MMD) party became president until 2011, when he was voted out of office together with the MMD in the same year.

8According to the World Bank (2019), Zambia is Africa’s second-largest copper producer which achieved middle-income country status in 2011, during a decade (2004-2014) of impressive economic growth, averaging 7.4% per year. Nevertheless, this growth only benefitted a small segment of the urban population and had limited impact on poverty country-wide. Zambia ranks among the countries with the highest level of inequality globally (World Bank, 2019). Fifty-eight per cent of Zambia’s population earns less than the international poverty line of US$1.90 per day (compared to 41% across sub-Saharan Africa), and three quarters of the poor live in rural areas. Zambia’s development strategy has focused on a rapid-scaling up of public investment to address the country’s infrastructure needs (World Bank, 2019). While public investment has increased sharply, economic growth remains well below levels seen earlier this decade and was 3.7% in 2018. Also, inflation averaged 7% in 2018, but a depreciation of the currency late in 2018, coupled with food price rises pushed inflation above 8%. Fiscal revenues exceeded budget targets in 2018, but the deficit widened above 10½% on a commitment basis (over 8% of Growth Domestic Product – GDP, on a cash basis) due to a rising interest bill and a surge in public investment reflecting faster than expected execution of public investment projects (World Bank, 2019). The account deficit widened to 2.6% of GDP in 2018 due to higher imports and debt service, while reserves declined from 2.4 months of import cover in 2017 to 1.9 months at the end of 2018 according to the International Monetary Fund (IMF, 2019).

9The foregoing projections were made before the Coronavirus (COVID-19) swept across the whole world with devastating effects. In its wake, COVID-19 decimated economies and resulted in many fatalities globally. Zambia was also severely impacted by COVID-19 with some people dying in the process (WHO, 2021). The World Bank (2020) reports that COVID-19 exacerbated Zambia’s macroeconomic vulnerabilities. Depressed commodity markets pushed copper prices down by about 14% through May 2020. The supply chain breakdown in major trading partners such as China and South Africa negatively affected domestic production and consumption. The country’s currency (Kwacha) depreciated by 30% since the beginning of 2020, increasing external debt servicing costs and domestic inflationary pressures. Falling revenues and increased COVID-19-related spending worsened the 2020 fiscal position, and falling exports and capital inflows put additional pressure on foreign exchange reserves. Thus, Price Waterhouse Coopers (PWC, 2021) reports that economic growth is projected to contract to 4.2% this year, in 2021, owing to the COVID-19 pandemic and on-going electricity shortages, which are putting the economy into recession for the first time in 22 years and raising questions about Zambia’s ability to manage its large debt burden. Copper price volatility plus a sharply weakened Kwacha are adding to Zambia’s economic woes. The next section presents the historical contours of the country.

Historical background

10When Zambia became independent in 1964, the new government which was led by Kenneth Kaunda and the United National Independence Party (UNIP) was able to deploy the country’s resources for the benefit of indigenous Zambians. Already, this feat was proving difficult to attain in the 1960s. According to Mhone (1982, p. 26), there were many challenges confronting the newly independent nation:

On attaining independence from Britain in 1964, the new nation of Zambia (formerly Northern Rhodesia) not only committed itself to accelerate economic development, but also declared its long-run intention to secure indigenous control over every major aspect of the economy. The Zambian government, however, faced at least two major constraints in its attempt to realise its goals. First, Zambia depended on Rhodesia for its energy supplies and transportation route for the export of copper, and on South Africa for its equipment and machinery. In the period immediately succeeding independence both Rhodesia and South Africa, being dominated by white minorities, had political ideologies diametrically opposed to that of Zambia, a country controlled by Africans. Secondly, the country’s economy was for the most part controlled by expatriates and foreign entrepreneurs whose monopolistic position vis-à-vis the indigenous population resulted in acute imbalances and inequalities. Attempts to correct the latter have resulted in inflationary pressures and balance-of-payment problems.

11Hereafter, the paper has segmented Zambia’s history into different political periods to facilitate a comprehensive understanding of the country’s evolution.

The pre-colonial and colonial periods

12Pre-colonial Zambia was totally different from the country today. It was characterised by a loose collection of indigenous polities that were governed by kings, chiefs or other forms of indigenous authorities (Roberts, 1976). At the dawn of colonial rule, there were four well organised polities, namely: the Bemba and Lunda kingdoms in the north, the Ngoni kingdom in the east and the Lozi kingdom or Bulozi (Barotseland) in the west. There were also stateless or nomadic societies or those that were vassals of other powerful kingdoms. Zambia was colonised by Britain from 1924-1964. Previously, from 1911-1924, it was overseen by the British South Africa (BSA) Company which had commercial interests in the area on behalf of the British Crown. At the helm of the BSA Company was the self-proclaimed arch imperialist, Cecil John Rhodes, who had amassed considerable wealth from his mining and other commercial interests spread across southern Africa (Noyoo, 2013; Roberts, 1976). The Zambian colonial setting was racially polarised and was constituted in such a way that it guaranteed better opportunities to Europeans, followed by Coloureds (people of mixed-race descent) and Indians, while Africans were at the bottom of this social ladder.

13The highly stratified colonial society clamped down on the African populace and did not allow them to maximise their potential. The colonial system was created in such a way that all the profits from copper mining and the general wealth of the colony went into the Europeans’ hands, while Africans were exploited as cheap labour and gained nothing in return (Noyoo, 2010). On the whole, it was an extremely exploitative system with a restricted possibility of ownership of property and access to employment for Africans at the lowest levels of the socio-economic ladder. In the mining industry, skilled and semi-skilled work were reserved for white labour, while management jobs were wholly out of the reach of Africans. There were no black army or police officers, judges, or senior managers. Commercial farming and the best land were monopolised by settler farmers (Noyoo, 2010, 2013; Turok, 1989, 1991).

14In the then Northern Rhodesia, unlike many other African colonies, a strongly knit European working-class core grew rapidly as a result of the copper mining industry. This was founded on a small scale at the beginning of the 20th century but expanded quickly in the 1920s (Turok, 1991). The mining industry was extremely influential in shaping social policy in colonial Zambia via the provision of social welfare services. From the time the mines were established, the link between their activities and other sectors of the economy was recognised. For example, it was anticipated that the ‘native labour’ requirements of the railways, the farms, the Department of Public Works and in fact the generation of every employment in the country’s other economic sectors would increase as mining expanded (Lungu & Mulenga, 2005). As early as 1929, the mines became responsible for the provision of housing and hygiene. This form of patronage also extended to wages and food, and various other social services. It was the duty of the mine management to provide well-arranged sanitary and orderly compounds to house the employees. Adequate hospitals for black workers were provided along with European medical staff (Lungu & Mulenga, 2005).

15The mine management also gave minimum scale rations to their employees; they distributed maize-meal, millet, rice, beans, meat, fresh vegetables, and groundnuts on a weekly basis. Cinema shows were also periodic treats for the miners (Lungu & Mulenga, 2005; Noyoo, 2010). Notwithstanding such overtures from the colonialists, the urban environment was typified by grave inequalities, poverty and social exclusion based on race. The miners had enjoyed a relatively higher standard of living than the rest of the African population in the colony. Nevertheless, the deplorable socio-economic conditions would make many Africans politically conscious, with many of them being mobilised by the emerging welfare societies and the African Mine Workers’ Union, to agitate for better living conditions in the colony (Lungu & Mulenga, 2005; Noyoo, 2010).

16Eventually, the welfare societies were amalgamated into one political formation and then transformed into the first nationalist movement to challenge colonial domination. The Northern Rhodesia Congress (NRC) was constituted after this decision in 1948, with Godwin Mbikusita Lewanika becoming its first leader. The NRC agitated for the enfranchisement of the indigenous people. It was later reconstituted as the Northern Rhodesia African National Congress (NRANC) and Harry Mwaanga Nkumbula became its leader. In 1959, the Zambia African National Congress (ZANC) broke away from the NRANC, with Kenneth Kaunda leading this new political party and other younger and radical members who had also defected from the NRANC. ZANC was immediately banned and its leaders arrested by the colonial authorities due to its militancy. The United National Independence Party (UNIP) which was immediately formed after this, employed strikes, boycotts, demonstrations and riots to press for independence. In 1962, the colonial government capitulated and allowed Africans to vote for their representatives (Rotberg, 1965). The elections took place in October of the same year but there was no outright majority after these elections. The United Federal Party (UFP) – a settler party – had garnered 21% (16 seats) and the African National Congress (ANC) got 17% (7 seats). The remaining eight seats were vacant. Thus, the two nationalist movements of UNIP and the ANC agreed to a power-sharing arrangement and became the first African formations to rule Northern Rhodesia via a coalition government. Kaunda became Minister of Local Government and Social Welfare and Nkumbula was the Minister of African Education. There was another round of elections in January 1964. This time, UNIP won 55 of the 65 seats and Kaunda became Prime Minister (Rotberg, 1965).

17Subsequently, in May 1964, the Northern Rhodesia Independence Confe-rence opened at Marlborough House in London with Duncan Sandys, the Commonwealth Secretary, chairing the talks (Rotberg, 1965). Concurrently, at the independence talks, there were negotiations relating to the future of Barotseland which, hitherto, was an autonomous and self-governed part of Northern Rhodesia. After 11 months of intense negotiations, the governments of Great Britain, Northern Rhodesia and Barotseland agreed in May 1964, at the Commonwealth Relations Office in London, to append their signatures to a political settlement referred to as the Barotseland Agreement 1964 (Caplan, 1970). This political settlement had sought to entrench some form of autonomy for Barotseland in the new nation to be called Zambia – with its institutions and governance structures taking precedence over those of Zambia. After the negotiations, the British and Northern Rhodesian governments agreed on an independence constitution and Zambia’s Independence Day was officially set for 24 October 1964.

The First Republic

18On 24 October 1964, Zambia gained independence from Great Britain after UNIP was voted overwhelmingly by the African majority in the elections of the same year. UNIP was quite sensitive to the plight of indigenous Zambians in terms of their economic empowerment and social advancement. These issues were its clarion call during the fight for independence. Tordoff and Molteno (1974, p. 11) observe that from the beginning, the party’s intention was to create an egalitarian society in order to achieve the goals of African self-determination, economic empowerment, self-reliance, self-worth and pride. It must be noted that after independence, the BSA Company had wanted to continue holding on to Zambia’s mining royalties despite the country being independent. Thus, there were protracted and intense negotiations between the new government and the BSA Company. Eventually, the Zambian government prevailed and wrested the royalties from the BSA Company. However, the government did not control the mines. Nevertheless, the government got some profits from the sale of copper. This revenue was used to develop the country, which had been acutely ignored and neglected by the colonialists; their prime motive was to externalise profits to Britain instead of developing the colony (Martin, 1972).

19The way the Zambian economy was structured at independence proved to be a major obstacle to development. It was tilted towards the production of primary commodities, dominated by copper, with unskilled and cheap labour supporting the production process. The country lacked skilled individuals and technical know-how. Its geographic position and poor infrastructure also made it unattractive to foreign investors (Mwanawina, 1993). Fortuitously, Zambia’s main export, copper, was in high demand and fetched huge profits. The revenue from copper was, up to this point, either externalised or invested into the welfare state of the European settlers. In this regard, the UNIP government, which was undergirded by an ideology of democratic African socialism, used the country’s wealth to correct the inherited colonial imbalances. To this effect, the Emergency Development Plan (EDP) was launched in 1964 which was followed a year later by the Transitional Development Plan (TDP). In 1966, the First National Development Plan (FNDP) was launched. The EDP, TDP, and FNDP were all economic and political blueprints, which aimed to transform the inherited colonial socio-economic relations through the state’s development planning machinery. Immediately thereafter, the government created a welfare state that guaranteed universal coverage of health-care, social welfare, education and employment, through an indigenisation policy known as Zambianisation. Furthermore, hundreds of primary and secondary schools, hospitals and clinics were built by the government. Thanks to the huge investments made by the government in the social sector, by 1970 the country had one of the highest levels of per capita incomes in sub-Saharan Africa (Jones, 1994).

20Despite the fact that copper profits were directed into social investments, the country’s economy was still in foreign hands. Zambia might have been politically liberated but it was economically dependent and indeed remained a neo-colonial state. Due to this situation, Humanism was declared Zambia’s national ideology in 1967 and this was followed by nationalising the commanding heights of the economy a year later. On 19 April 1968, Kenneth Kaunda announced the government’s decision to nationalise all private retail, transport and manufacturing firms in the country and this policy came to be known as the Mulungushi Reforms. The government was to acquire 51% shares through the newly created parastatal, the Industrial Development Corporation (INDECO) (Martin, 1972; Tordoff & Molteno, 1974). On 11 August 1969, the Matero Reforms were announced and the government purchased 51% shares from the existing mining companies: Anglo American Corporation (ACC) and Roan Selection Trust (RST), leading to the partial nationalisation of the copper industry. After this second phase of nationalisation which encompassed mining, energy, transport, tourism, finance, agriculture, services and commerce, trade, manufacturing and construction sectors, 80% of the economy was now under state control (Martin, 1972; Tordoff & Molteno, 1974).

21Additional reforms were carried out on 10 November 1969. These were extended to the financial sector including the insurance companies and building societies but excluded the banks, which successfully resisted being taken over (Noyoo, 2010; Turok, 1989). For a while, Zambians enjoyed a decent standard of living and were guaranteed upward social mobility through universal education and employment. However, by the end of the 1970s social and economic conditions had stalled and began to slide backwards. Also, copper prices began to plummet on the world market after the country had nationalised its mines. In addition, Kaunda and UNIP had become autocratic. By December 1972, Zambia was declared a one-party state under the so-called Second Republic.

The Second Republic

22The Second Republic lasted for 17 years, when Zambia was a dictatorship. Under dictatorship, policy development became more and more erratic. Zambia’s economy had collapsed during this period which was initially triggered by the first global financial meltdown after independence. This was after the oil crisis of 1973 when the world was thrown into a tailspin when Arab countries of the Organisation of Petroleum Exporting Countries (OPEC) decided to enforce an oil embargo against the United States of America (Gertzel et al., 1984; Tordoff & Molteno, 1974). During this period, oil prices rose exponentially high and increased production costs for various countries’ industries. This also dampened the prices of exports on international markets, especially raw materials such as minerals and agricultural products. In the same vein, copper prices fell drastically to low levels (Gertzel et al., 1984; Tordoff & Molteno, 1974). The effects for the country’s economy were devastating as Zambia had not, up to this time, diversified its economy. The first oil embargo saw the Zambian government borrowing from multilateral lending agencies in order to cushion the negative effects of the global economic crisis on Zambia’s economy. Such temporary measures by the government, which were short-sighted, had effectively dug Zambia into a debt hole that led to the country’s economic dividends being wiped out altogether.

23By the second oil crisis of 1979 and 1980, there was another sharp decline in the price of copper (Gertzel et al., 1984; Tordoff & Molteno, 1974). As a consequence, the country experienced a negative trade balance. Treating the crisis only as temporary, the government of Zambia did not properly respond to the economic changes. It continued to run a budget deficit, resulting from the unexpected low revenue in 1975 and the need to pay for increased imports. Rising import prices, due to import licensing, all contributed to rising inflation rates (Nokkala, 2001). The increased public expenditure on consumption had also adversely affected domestic savings and this, in turn, reduced domestic investment considerably. Thus, although Zambia’s capital formation during the 1971-76 period averaged 13% of GDP, this had declined to 10% of GDP at the time the Structural Adjustment Programme (SAP) was introduced in 1985 (Saasa, 2001).

24As the economy continued to be in free-fall, the cost of living had become extremely high and in 1986 Zambia experienced its first food riots. The IMF / World Bank economic reforms had led to the government removing subsidies on the country’s staple food, maize meal, which became very expensive. This was too much for the ordinary Zambians and the miners in the region known as the Copperbelt instigated the riots. Kaunda immediately cancelled the IMF / World Bank programme and tried to implement his own. However, this effort was futile, and Kaunda reinstituted the IMF / World Bank programme due to a lack of funds (Noyoo, 2010). Also, the development paradigm of the UNIP regime was haphazard and devoid of basic policy-driven programmes. Although the UNIP government was compelled to undertake economic restructuring by the IMF and the World Bank during this period, the remedial measures that were followed did not create a real meaningful impact on the structural and long-term state of the economy. They tended to be piecemeal and at best not comprehensive enough. Evidence points to unsteady and contracting economic activities as well as unstable and generally deteriorating social welfare (Lewanika, 1990, p. 101).

25Due to this unfolding deplorable scenario, the cost of living skyrocketed and the Zambian currency, the Kwacha, was devalued to unsustainable levels as it continuously lost its value on a weekly basis. Comparable to the American dollar, the Kwacha’s weakening also translated into high costs of imports – bearing in mind that Zambia’s economy was heavily import-based, with all essential commodities being imported from overseas. Towards the mid-1980s, the ruling party had become monolithic and was a major drain on the national economy. Parastatal organisations were also not only highly inefficient but had become the conduits for corruption and shady deals pursued by equally incompetent officials. In June 1990, the government increased the price of mealie meal after another round of IMF / World Bank inspired reforms (Noyoo, 2010). This time, Kaunda and UNIP would not survive as their actions precipitated the biggest uprising against Kenneth Kaunda in post-colonial Zambia. This uprising was instigated by the students of the University of Zambia (UNZA) who not only demanded better living conditions, but regime change. Eventually, Kaunda and UNIP were voted out of power by Zambians through a popular vote, in 1991, after being in power for 27 years (Noyoo, 2010). A new government of the Movement for Multi-party Democracy (MMD) was installed thereafter. Its new leader was the late Frederick Jacob Titus Chiluba. This new political dispensation is referred to as the Third Republic.

The Third Republic

26On 1 November 1991, Frederick Jacob Titus Chiluba, a 48-year-old former labour leader, was inaugurated as Zambia’s second president. After this, a new Constitution ushered in the Third Republic, which gave more powers to the legislature and judiciary – even though this was more on paper than in practice. It also guaranteed political competition in the form of multi-party politics. However, the president still had sweeping powers as in the former one-party state. Chiluba and the Movement for Multi-party Democracy (MMD) had secured a decisive mandate from the Zambian people who were tired of one-party rule exemplified by brutality and incompetence. The Third Republic was characterised by the fast-paced liberalisation of the economy and a strict adherence to the IMF’s and World Bank’s economic prescripts determined by the SAP (Noyoo, 2013, 2021). Thus, the MMD government immediately set out to dismantle the pillars of the one-party state.

27Socialism and the ideology of Humanism were discarded and no longer relied on to guide the government’s social and economic policies. The liberalisation programme, which the UNIP government had dithered around, was emboldened and implemented decisively by the new administration. It was also extensive and covered trade reforms, the abolishing of import licences and marketing boards, and retrenchments, among others. With the MMD, there was a commitment to reduce the role of the state to merely maintaining law and order, and effectively playing the role of the proverbial ‘night watchman’. It also began to vigorously steer Zambia towards a neo-liberal market economic system exemplified by the privatisation of state-run enterprises and the reduction of the civil service (Noyoo, 2010).

28However, the MMD’s accelerated economic restructuring programme was extremely dislocating and lacked supporting institutions that could have at least militated against the negative economic impacts on Zambians. Poverty and huge job losses attenuated the living standards of Zambians. The problem with the liberalisation of the economy and other forms of deregulation during Chiluba’s rule was that they were not based on sound theoretical and nationalistic positions but were self-defeating. Despite the restructuring of the economy being undertaken, there were also other deleterious activities such as rent-seeking and clientelistic tendencies that were perpetrated by state functionaries, which gravely undermined the restructuring of Zambia’s economy (Noyoo, 2010, 2013). The liberalisation of the economy was also not strategic in approach, and thus the MMD government went about dismantling the public sector, with dire consequences for the country.

29In the midst of liberalising Zambia’s economy, Chiluba and the MMD were steadfast in privatising the copper mines in 1991, but which only began in 1997. Mususa (2010) notes that the sale of the mines resulted in massive job losses for workers, both those employed directly by the mines and those employed as part of the mine economy. The re-privatisation of the mines was seen as inevitable in the early 1990s. Since the 1980s, the Zambian state had controlled about 80% of the country’s mining and other formal sector industries. However, despite these hardships, Mususa (2010) argues that the liberalisation of the Zambian mining industry and the ensuing economic crisis was not only about ‘winners and losers’ as argued by Frazer and Lungu (2006), but it resonated with the creative process of trying to earn a livelihood through on-going effort, the ability to take advantage of and manipulate social situations and the garnering of new moralities to justify and explain economic activities that fell outside the remit of the formally legal. For Mususa (2010), people’s agency was not as limited as the indicators of macro-economic structural failure seemed to suggest (Mususa, 2010, pp. 391, 392).

30What emerges from the re-privatisation period is something akin to ‘re-colonisation’ of the country as most Zambians argued, at the time, as the new expatriate owners of the mining firms were no longer providing social benefits as the privatised firms used to. There was also a culture of employing only expatriates in senior management positions in these new mining firms. This made many Zambians workers not only frustrated but bitter (Noyoo, 2021). The miners’ perceptions were not surprising given that they had a high degree of class consciousness and class action among them during the 1950s and 1960s. Miners were the most organised workforce in Zambia during the said period. The black miners had gradually evolved collective forms of labour protest, no doubt facilitated by early stabilisation, a family-based ‘compound life’, and common experiences at work and in the mining compounds (Parpart, 1987, p. 55). According to Uzar (2017), Zambia had one of Africa’s strongest labour movements until the structural adjustment measures crushed it in the 1990s. Indeed, during the privatisation period, the power of the labour movement had been wilted away and it can be argued that this had been at the behest of the MMD government and especially the president, Frederick Chiluba.

31In the end, the dividends from the privatisation initiative did not filter down to the rest of the society and arguably, only benefitted a clique of politically connected Zambians. Despite this, there was some agency from the weakened unions as there were strike actions in the first months of the MMD’s rule. However, these did not steer the government away from the privatisation path. Also, the social and economic conditions worsened under the MMD administration. Even though the MMD stressed on ‘safety-nets’ – which broadly defined, are interventions specifically designed to sustain or enhance the welfare of poor or vulnerable groups at a time of economic transition (Graham, 1997) – the rapid downward spiral in the living standards of Zambians continued. This is because safety-nets in Zambia were underfunded and unable to offer any serious mitigation to the losers from trade liberalisation.

32The MMD government had less capacity to assist the losers of trade reforms, given its limited fiscal resources. This was reflected in the adoption of a cash budget that restricted spending to domestic revenue performance. In 2002, after narrowly winning the elections of December 2001, Levy Patrick Mwanawasa became Zambia’s third president. He had barely beat Anderson Mazoka of the United Party for National Development (UPND). Mwanawasa secured 28.7% of the vote while Mazoka had obtained 26.8% (Noyoo, 2010). The elections had been conducted amid allegations of electoral fraud and misconduct. After Mwanawasa replaced Chiluba, he set out to rectify the country’s reckless privatisation programme and also implemented drastic measures against graft and corruption in government. These reforms were undertaken despite Chiluba handpicking Mwanawasa to lead the MMD.

33During Mwanawasa’s rule, Zambia experienced consistent positive economic growth after decades of dismal economic performance. After almost 30 years, the country had even managed to exhibit a single digit inflation rate of 7.9% (by October 2006) and 6% growth rate in the Growth Domestic Product (GDP) (Noyoo, 2010, 2013). The local currency, the Kwacha, also strengthened in value against major convertible currencies, such as the United States dollar. Furthermore, Zambia managed to attain what is known as the Heavily Indebted Poor Countries (HIPC) completion point in April 2005, making it possible for the bulk of the country’s external debt to be written-off altogether, in line with the benchmarks set by the G8 nations, the IMF and the World Bank (Noyoo, 2010, 2013). As earlier noted, when Mwanawasa became president, he attempted to take control of the run-away liberalisation process that was started in the Chiluba era. More importantly, Mwanawasa sought to make the privatisation of the copper mines tilt in Zambia’s favour and not foreign firms. However, this was not easy as Chiluba’s administration had not been scrupulous in the way it entered into agreements with foreign mining firms (Noyoo, 2010, 2013). When Mwanawasa passed away in August 2008, the country’s fortunes dimmed when Rupiah Banda took over as president. Banda would not only lead Zambia in the wrong economic direction but managed to squander both the financial reserves and good will that Mwanawasa had solidly built. By the time Michael Sata and the PF came to power, Banda had already thrown Zambia into an economic crisis. Sata and the PF merely accelerated and amplified Zambia’s social and economic malaise (Noyoo, 2013).

34Many commentators point to Sata’s and the PF’s so-called leftist politics. This is quite erroneous as Sata and the PF did not exhibit any ideological clarity, apart from relying on harsh rhetoric which was aimed at the Chinese and other foreign owned businesses in Zambia. The PF also had an uneasy relationship with the labour movement. This contradiction is noted by Uzar (2017, p. 294): “Even though the new ruling party came to power with a leftist, resource nationalist agenda, it suppressed organised labour nearly as much as the previous regimes.” Again, this is not surprising as the PF and Sata did not have ideological anchorage. Many commentators seem to have confused rhetoric for ideology in the case of Sata and the PF. That is why it was very easy for Sata and the PF to easily flip-flop on major policy positions including the manner in which the profits from the mining sector could be taxed and redeployed for social investment and social welfare purposes. This ideological muddling militated against the PF arriving at a clear strategy to engage with multinational mining firms which were operating in Zambia. The PF and the state had limited ability to regulate the activities of transnational corporations (Uzar, 2017).

35This weakness was extended to the administration of Edgar Lungu, who succeeded Sata. This, despite Lungu’s government introducing various Tax Amendment Acts in January 2020, in line with the pronouncements made in Zambia’s 2020 National Budget. The Minister of Finance had announced that the government would be working on broader reforms aimed at increasing tax revenue and improving compliance. The tax amendments address key areas in the mining industry as well as introduce cross-industry tax measures (Ernst & Young, 2020). Without ideological clarity and strategies, it remains to be seen how the PF government will make these tax reforms work for ordinary Zambians.

Agency and local control of copper production: which way forward?

36It is important to note that the Zambian state had sought to take control of the production and export of its main mineral export, copper, in the late 1960s. Suffice it to say, the nationalisation of not only the copper mines, but the rest of the economy, ultimately became a disastrous undertaking (Lewanika, 1990). Despite this, it can be argued that this was the first attempt at agency, by the state, to have direct control of Zambia’s resources. Nevertheless, this strategy back-fired with dire consequences for Zambia’s development. That being said, not all was doom and gloom with nationalisation. It is worthy of note that nationalisation had led to significant changes: from liberal policies, to a more restrictive policy environment that entailed increased government involvement in national development. Policies attempted to diversify the economy from mining through industrialisation and import substitution. The main strategy for import substitution was the introduction of various parastatal companies through which the local manufacturing sector was protected, by high tariffs and an over-valued exchange rate. Price controls for major commodities were also put in place, according to the United Nations Development Programme (UNDP, 2003). Crucially, parastatals were supposed to be arteries through which the government could begin to increase the scope of social welfare provision, expand employment and re-orient economic activity in various ways. Indeed, social welfare improved with the creation of the Workmen’s Compensation Board and the Zambia National Commercial Bank in 1969. The bank became the first Zambian owned commercial bank to provide services for the lower income groups as well as Zambian business men, women and farmers (Turok, 1989).

37As earlier highlighted, in pursuit of an egalitarian society that was guided by Humanism, the government invested heavily in education and health infrastructure, such as the University of Zambia (UNZA), the University Teaching Hospital (UTH) and thousands of schools, colleges, and district hospitals which did not exist in the colonial era. These facilities opened up socio-economic opportunities for many previously disadvantaged Zambians (UNDP, 2003). In 1982, the nationalised mining companies of the Roan Selection Trust and the Anglo-American Corporation mines were amalgamated to form the Zambia Consolidated Copper Mines (ZCCM) which became a major player in the country’s development. It mirrored the state’s development philosophy and supplied social amenities much wider in scope than those provided during the colonial period, including free education for miners’ children, alongside subsidised housing and food, electricity, water and transport. ZCCM literally operated a ‘cradle to grave’ welfare policy, even subsidising burial arrangements for the dead (Frazer & Lungu, 2006). The mines did not only just look after their workers, but they also provided services to the whole community. They managed the environment in the mine townships, maintained roads, and collected refuse, as well as provided cafeterias, bars, and social clubs in the mine townships. They encouraged the growth of economic and social activities dependent on miners’ incomes, such as shops, farms to supply food to the mine areas and other industrial activities (Frazer & Lungu, 2006).

38Even though initially the intention to nationalise the economy was noble, Kaunda had done this without undertaking a broad consultative process (even his cabinet was not aware of this move before it was announced). Nationalisation was also used for political expediency. When examining the 1967 Mulungushi UNIP internal elections, it can be said that they were the first and biggest threat to Kaunda’s leadership since independence in 1964. Thus, it was not coincidental that a year later, nationalisation was implemented. Naturally, Kaunda had to secure himself politically through nationalisation. Furthermore, in 1968, UNIP had suffered major losses at the national polls when the opposition gained ground. Arguably, nationalisation was Kaunda’s and UNIP’s way of appeasing the masses. It is important to note, however, that there is nothing inherently wrong with nationalisation if it is well-mapped out, well thought-out, devoid of political machinations or interference, nepotism, ethnic agendas, corruption, or clientelistic tendencies. But this has hardly been the case in Africa. For instance, Coleman (1991) argues that politicians of all shades have advocated nationalisation – communists, socialists, social democrats, liberals, conservatives or fascists. Many good things came out of Zambia’s nationalisation, such as universal education and health-care. However, nationalisation also funded nefarious things such as patronage, state repression and a blotted government bureaucracy.

39The centrality of the copper mines in Zambia’s sustainable development is unquestionable and they are inextricably bound up with the living standards of Zambians. Therefore, the shift from nationalisation and privatisation of copper mines highlights the role of copper in the country’s overall development and prosperity. Lungu (2008, p. 403) explains that as long as the mining sector was performing well and enjoying high international prices for copper, there were more revenues to the government and it could afford the provision of, for example, free public health. He rightly notes that it is however paradoxical that in the upturn of commodity prices, the Zambian government did not obtain enough revenues to enable it to provide the required goods. Lungu’s points are noted by this article whilst bearing in mind that successive administrations from Kaunda’s, to a less extent, Mwanawasa’s, were exemplified by high corruption levels and unchecked maladministration, among others. It can be noted that the liberalisation of Zambia’s economy only diminished the government’s ability to mobilise the country’s resources, especially copper, for national development. Privatisation in Zambia neatly fits the model where the exploitation of its resources by multinational corporations resulted in socio-economic inequality, deterioration in labour and employment standards, environmental degradation and the exclusion of most of the people from accessing essential social services (Lungu, 2008). Local ownership and the exploitation of a country’s resources are central to its development as well as continental and global development imperatives. For example, the implementation of Agenda 2030 and the African Union’s Agenda 2063 hinge on Africa’s ability to mobilise enough, predictable and timely financial resources. The Addis Ababa Action Agenda reaffirms that mobilisation and effective use of domestic resources, underscored by the principle of national ownership, are central to achieving the sustainable development goals according to the United Nations Economic Commission for Africa (ECA, 2016).

40Due to the foregoing, it is important for Zambia’s sustainable development actors, such as non-governmental organisations (NGOs) and the labour and social movements to play bolder and critical roles in this arena. The last part of this paper takes into critical consideration the notion of local actors defining the way resources are not only mobilised but redistributed for inclusive and sustainable development. It takes into critical cognisance the issue of agency by local actors. Ahearn (2001) notes that agency is a form of social action. This paper argues that social action should be taken by both organs of civil society and the government. Two key ways of inserting agency into the Zambian economy and especially the copper mining arena are: (a) challenging the hegemony of foreign firms in the mining sector and (b) breaking out of the country’s path dependence.

Value addition and beneficiation

41One of the main deficits associated with the re-privatisation of the copper mines is the reluctance on the part of foreign firms to invest in the country’s sustainable development. These foreign mining firms have the propensity to externalise profits to their mother countries and to ignore the sustainable development of Zambia. Therefore, agency is needed at this level from the unions, NGOs and the government. This is a very important area that has been neglected both before the nationalisation of the copper mines and after they were re-privatised (Noyoo, 2021). Since independence, Zambia has consistently exported its natural resources, including minerals in raw form. This is unacceptable after five decades of independence. There is a need for local actors to agitate for the processing of the country’s minerals and other natural resources. Value addition and beneficiation will lead to the creation of new industries and thus translate into many jobs in the country. Also, there will be more roles to be played in this area by the government and the citizens. Furthermore, this would create strong backward and forward linkages in Zambia’s economy. A forward linkage is established when the output from one industry, “A”, encourages production in another industry, “B”, primarily because of reduced prices of main inputs. This mechanism may not work effectively by itself but is potentially powerful when coupled with a backward linkage, acting on industry “B” (Roemer, 1970). In this way, profits would be maximised as they would be in the hands of locals and would be re-invested into other areas of the economy and thus expand employment opportunities. Currently, most of the profits accrued from the sale of copper are externalised and not catalysing Zambia’s sustainable development.

Expanding and revolutionising the agricultural sector

42A sure way of mobilising Zambia’s resources for sustainable development is for the government and the private sector to invest, modernise and invigorate the agricultural sector, which has a huge potential to break the country out of its path dependence. Since the presidency of Levy Mwanawasa, Zambia has not shown serious commitment and urgency to optimise this sector’s development. Agriculture is the most viable industry that could steer Zambia away from its overdependence on copper mining. It is important to note that Zambia spans 75 million hectares, of which 58% is classified as medium to high potential for agriculture production (Nordea Trade Portal, 2021). However, agriculture in Zambia remains largely underexploited, with only 15% of its potential arable land under cultivation. The sector’s low contribution to GDP is attributable to poor rural infrastructure and extreme vulnerability to climate change impacts such as droughts. Zambia’s agricultural sector focuses mainly on crop-farming (maize, cotton, soybeans, tobacco, groundnuts, paprika, sorghum, wheat, rice, sunflower seeds) and livestock production. The country is also one of the biggest seed exporters in Africa (Nordea Trade Portal, 2021).

Conclusion

43In concluding this paper, perhaps it is pertinent to ask “Are any lessons that can be learnt from the Zambian case in terms of resource mobilisation, especially in the extractive industry such as copper mining?” Before answering this question, it should be noted that an emphasis on the expansion of the extractive industries has, for the most part, failed to deliver much-anticipated development to sub-Saharan Africa. There is broad consensus in the literature that host governments are not equipped to handle this level of industrial expansion; and that the sudden arrival of mineral and/or oil rents has simply exacerbated pre-existing societal inequalities, nourished rentier politics and/or further divided societies (Hilson, 2014, p. 1). In the most extreme of cases, such as Nigeria (oil) and Sierra Leone (diamonds), natural resource wealth has perpetuated conflict; and, as witnessed in the likes of Angola (oil and diamonds) and Equatorial Guinea (oil), it has fuelled kleptocratic and autocratic behaviour. This raises an important question: does the current extractive industries and development model being followed in sub-Saharan Africa need to be overhauled, and are donors and governments prioritising the right things? (Hilson, 2014, p. 1). The answer to Hilson’s first part of the question is yes; the extractive industries and development model being followed in sub-Saharan Africa needs to be overhauled, and the answer to the second part of the Hilson’s question is no; donors and governments are not prioritising the right things. This is because the development model in the extractive industry is not based on clear nationalistic and development imperatives. The example of Zambia almost fits the foregoing narrative. However, the country nearly broke out of its path dependence when it nationalised its copper mines in the 1960s. The problem with the political regime then was that the country did not have a strategy beyond nationalisation. When the copper mines were re-privatised, path dependence was reinforced and thus disabling the country altogether in matters of sustainable development. This is what happens when there are wasted opportunities in this arena. Thus, path dependence in the case of Zambia is not inevitable as the country’s development trajectory could have been altered through strategic thinking and planning.

44This paper discussed resource mobilisation in Zambia with a particular focus on copper mining. The chapter highlighted the overdependence on copper mining by successive political administrations, from independence to date. Due to this, copper continues to define Zambia’s sustainable development prospects and the quality of life of its citizens. This is because the revenues from the sale of copper are vital for shoring up Zambia’s economy and for propping up the government’s expenditure on social services, among other things. The paradox here, however, is that this key industry has for the most part of its existence been in the hands of foreign firms, which in the end externalise the revenues to their countries of origin and are not concerned about the development of Zambia. The paper showed that during the nationalisation period, Zambia had initially benefitted from it, with profits from copper being deployed to build social infrastructure and expand the economy. The paper suggested ways to improve Zambia’s resource mobilisation efforts and to wean the country off copper mining. Agency was seen as missing in the foregoing initiatives and this paper argued that government and civil society actors needed to be guided by the aforementioned.

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Notas

1 At the time of writing this article, Edgar Chagwa Lungu was still the president of Zambia. However, when the article was going to press, Lungu had been defeated at the polls by Hakainde Hichilema of the United Party for National Development (UPND), after the general elections of 12 August 2021. Lungu’s party, the Patriotic Front (PF) was also defeated at the polls. Hichilema was overwhelmingly voted by Zambians, making him the country’s seventh president since its independence in 1964.

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Ndangwa Noyoo, «Mobilising Natural Resources for Sustainable Development: Copper mining and path dependence in Zambia»Cadernos de Estudos Africanos, 41 | -1, 119-144.

Referência eletrónica

Ndangwa Noyoo, «Mobilising Natural Resources for Sustainable Development: Copper mining and path dependence in Zambia»Cadernos de Estudos Africanos [Online], 41 | 2021, posto online no dia 08 fevereiro 2022, consultado o 21 maio 2022. URL: http://journals.openedition.org/cea/6393; DOI: https://doi.org/10.4000/cea.6393

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Autor

Ndangwa Noyoo

Department of Social Development, University of Cape Town, Rondebosch, 7710 Cape Town, South Africa, ndangwa.noyoo@uct.ac.za

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