Why should foreign investors care about the elections taking place in Zambia? The reason in one word: copper.
Zambia is the world’s eighth largest copper producer, the largest producer in Africa, and with the recent plunge in the prices of commodities, the economy of that country has suffered. Yesterday’s election was brought about by the death of President Michael Sata in October, which has forced an early vote.
This election will be a double-edged sword for the winner, because the scheduled general election is slated to take place in 2016. This doesn’t give the winner much time to implement positive programs, but it’s enough time in which to mess things up. Zambia is probably the most stable democracy in Africa and has an electorate that is active and engaged. They are known to throw out governments that don’t keep their promises, and that is more the norm than the exception.
One of the two candidates for President is Edgar Lungu, who belongs to the current ruling party and one would think would be an overwhelming favourite to win. However, fighting within his party, the Patriotic Front, has weakened him so that if he does win over his opponent, Hakainde Hichilema of the United Party for National Development, it will be only by a whisker.
For those investors that invest in global commodities, you can do no better than reading an article in the Daily Maverick which explains the stakes in yesterday’s election.