“ECL’S BILLION KWACHA LEGACY – ESTHER BANDA
…….Roads, Debt, and the Fight to Rebuild Zambia’s Economy”
The economic legacy of former President Edgar Chagwa Lungu, who led Zambia from 2015 to 2021, remains a subject of robust discussion among economists, policymakers, and citizens. His tenure was marked by ambitious infrastructure projects, strategic subsidies, and efforts to shield vulnerable populations amidst complex economic pressures.
Economist and CHRESO University DEAN FACULTY OF BUSINESS HUMANITIES AND EDUCATION lecturer, Esther Banda, describes Lungu’s economic record as “a mixture of bold investments and difficult trade-offs.” She highlights that “much of the public resources were directed towards infrastructure roads, schools, hospitals, and airports demonstrating a commitment to long-term national development.”
Under Lungu’s administration, Zambia embarked on expansive infrastructure development aligned with national priorities. The government invested heavily in expanding road networks, boosting energy generation capacity, and improving healthcare delivery.
While these investments improved access to essential services, they were largely financed through external and domestic borrowing, which significantly increased Zambia’s public debt burden.
“There was enormous pressure on the Treasury,” Banda observes. “The administration’s ambition to modernize the economy quickly required substantial spending, but this came at the cost of fiscal sustainability, limiting the fiscal space for succeeding governments.”
The global pandemic and Zambia’s persistent power shortages in the late 2010s presented additional challenges. Nonetheless, Banda notes that local manufacturing and agriculture sectors showed remarkable resilience.
“The government introduced targeted incentives and financial relief for businesses, especially SMEs,” she explains. “Support from institutions like the African Development Bank and partnerships with Copperbelt Energy Corporation (CEC) were vital in cushioning the economic shock.”
The depreciation of the Zambian kwacha and rising inflation further strained household incomes and business operations. To mitigate these pressures, the government implemented subsidies, particularly in agriculture and energy, aimed at maintaining food security and competitiveness.
“The kwacha’s weakness was driven by import-export imbalances,” Banda states. “Subsidies in fuel and agricultural inputs helped to stabilize prices and sustain local production despite fiscal constraints.”
For instance, fuel prices remained relatively stable, with pump prices averaging around K17 per litre by the end of Lungu’s presidency, despite Zambia’s reliance on imported petroleum products. However, these subsidies intensified the fiscal pressure on government coffers.
In addition to economic stimulus, Lungu’s government expanded social welfare programs, such as the Social Cash Transfer scheme, designed to support elderly and vulnerable groups. Resources were also allocated to improve governance and anti-corruption efforts, though some critics questioned the effectiveness and transparency of these measures.
Efforts to attract foreign direct investment (FDI) during Lungu’s administration focused primarily on mining and infrastructure sectors, stimulating job creation and economic activity. Yet, Banda cautions that “growth was unevenly distributed,” with rural communities continuing to face poverty and limited market access.
“The disparity between urban and rural areas remains a major challenge for inclusive growth,” she says.
Looking forward, Banda underscores the importance of industrialisation and export diversification to build a resilient and sustainable economy. “Value addition in Zambia’s exports must become central to economic policy,” she argues. “Reducing dependence on copper and restructuring public debt are critical priorities.”
She further advocates for enhanced investment in human capital development and institutional transparency, alongside stronger regional and international diplomacy.
“Building economic independence requires homegrown solutions that reduce reliance on foreign aid and excessive borrowing,” Banda asserts.
In reflecting on President Lungu’s tenure, Dr. Banda emphasizes the lasting impact of his infrastructure projects. “Improved roads facilitated better market access for farmers, boosting incomes and supporting rural economies,” she notes. “His administration’s success in attracting foreign investment also expanded job opportunities for many Zambians.”
While acknowledging the complexities faced by any leader, Banda encourages citizens to appreciate the foundational progress made under Lungu’s leadership.
“These developments lay the groundwork for future economic growth and social development,” she concludes. “Lungu’s legacy is a reminder that bold vision, combined with prudent policy, can transform a nation.”
June 7, 2025
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