Haemorrhaging Zambia: Prequel to the Current Debt Crisis

Following a stand-off with commercial creditors and protracted but unresolved negotiations with the IMF, Zambia defaulted on its external sovereign debt on 13 November this year. While most commentary has focused exclusively on the government’s sovereign borrowing, our own research has detected massive outflows of private wealth over the past fifteen years, hidden away on an obscure part of the country’s financial account. The outflows are most likely related to the large mining companies that dominate the country’s international trade. With many other African countries also facing debt distress, the lessons of this huge siphoning of wealth from the Zambian economy need extra attention within discussions about debt justice in the current crisis. We explain here what we’ve found.

Zambia was already debt-stressed going into the COVID pandemic. The economy was hard hit following the sharp fall in international copper prices from 2013 to 2016, especially that copper made up about 72% of its exports in 2018 (including unrefined, cathodes and alloys). Following a severe currency crisis in 2015, the government entered into negotiations with the IMF but never agreed on a programme. There was some improvement in macroeconomic outlook in 2017 due to rising copper prices, which sent international investors throttling back into optimism. However, international investors again turned against the country in 2018 in the midst of the global emerging market bond sell off, which compounded the effects of severe droughts in 2018-19. As a result, the government was already teetering on the edge of default on the eve of the COVID-19 pandemic. The economic fall-out of the pandemic has since pushed the country over the edge (see an excellent analysis here).

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‘Life On These Stones Is Very Hard’ – House Helps in Covid-19 Nairobi

Photo: Eric Kioko, August 2020.

By Mario SchmidtChristiane Stephan, Kawikya Judith Musa and Eric M. Kioko 

Panic! Rush! Empty sacks! Women running! Big cars passing by! Boom! All women stare at the same spot on the road: a car passing by. Within seconds, many of them rush towards it. One who was selling roasted maize, water and a few more goods leaves her place of work opposite the road and runs towards the vehicle as well. Panic and competition are in the air. Within a few minutes, the women come back, discouragement and lack of morale palpable in their bodies and faces. “What happened?”, one of those left seated asks. “The driver didn’t think we were this many, so he closed the car´s door and left!”

This scene gives insight into dynamic moments taking place along the roadsides of Nairobi’s affluent suburbs since the onset of the Covid-19 pandemic. It displays the intensified competition characterizing the job market for informal house helps looking for work and financial or material assistance. Suburbs like Kileleshwa or Kilimani present an unusual picture to those accustomed to see African cities through photographs of slums and shantytowns. Yet, here we have elegant residential areas mushroomed in leafy environments, roads with pedestrian walkways for cycling and jogging, cosmopolitan coffee joints, posh malls, and police patrols.

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“There is a Lot of Pressure on Me. It’s Like the Distance Between Heaven and Earth” – Landscapes of Debt, Poverty-in-People and Social Atomization in Covid-19 Nairobi

Photo: Jack Omondi Misiga

By Mario Schmidt, Eric Kioko, Evelyn Atieno Owino and Christiane Stephan

Everyday economic life in Nairobi has been transformed following the COVID-19 containment measures installed by the Kenyan government. In the immediate aftermath of Kenya’s first case reported on 13th March 2020, President Uhuru Kenyatta shut down air travel, introduced a nationwide curfew for the night hours, introduced a mask requirement, reduced passenger numbers in public transport, closed schools and institutions of higher learning and restricted social gathering. These measures set in motion transformations that span across various networks and scales of the urban. In order to analyze the effects of Kenya’s political elite’s response to the Covid-19 pandemic on urban households, we have teamed up with five Kenyan colleagues who conducted over two hundred qualitative interviews in different locales of Nairobi and Nakuru. In Nairobi, our assistants, who made sure that measures of COVID-19 containment and personal safety were respected, worked in the informal settlement Kibera, the low-income tenement settlement Pipeline (Embakasi), and Kileleshwa, home to richer Nairobians and expats. Our research assistants interviewed Nairobians from the age of twenty to over eighty years. Among the respondents were migrants and people born in Nairobi, casual, unemployed and laid-off workers, maids, housewives, Uber drivers, white collar workers, shop owners, club bouncers, artists, daycare owners, tailors who found a new job producing face masks, waiters, chefs as well as people employed by NGOs. 

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Blog Series: Pressure in the City

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The Covid-19 pandemic and the restructuring of the global economy it has triggered have exacerbated the need to study a topic that has flown under the radar of social scientists for too long: individuals and social groups experiencing economic pressure which manifests in myriad of somatic and psychological ways. The fallout from pressure — sleeplessness, ulcers, an atmosphere of hopelessness and social mistrust, gambling, suicides, as well as a growing concern about a lack of mental health facilities in cities of the Global South — now pervades urban as well as rural environments around the world. This blog series aims at taking a fresh look at the phenomenon of economic pressure through a decisively comparative and interdisciplinary approach. We will critically interrogate the role of economic pressure in the lives of both the rich and the poor, the unemployed and the workforce, across class and continents in order to answer, among others, the following questions:

  • What meanings does economic pressure take on as it travels between different contexts?
  • How do city dwellers of diverse class, religious and gender backgrounds experience pressure in their professional and private lives? How do they accommodate, negotiate and deflect pressure?
  • Does economic pressure offer new analytical possibilities vis-à-vis other concepts used to describe similar phenomena (e.g. poverty, uncertainty, precarity etc.)?
  • What is the relation between individually perceived economic pressure and structural changes of the economy or polity?
  • What moral valuations do urban residents assign to economic pressure? What logics underpin ‘good’ and ‘bad’ forms of pressure?
  • How can inter-disciplinary methodological and/or theoretical approaches deepen our understanding of economic pressure —the forms it assumes, the actions it motivates and the effects it generates?

We welcome contributions from a wide range of scientific disciplines (political economy, anthropology, economics, sociology, development studies, gender studies, international relations, geography, etc.) as well as other professions (such as practicing psychologists, counselors, activists, bankers, sports professionals etc.). As the blog’s organizers are all Africanists, the blog will, however, have an initial focus on sub-Saharan and, especially, Eastern Africa. We are confident that this will be balanced over time.

  • Pressure in the City: Stress, Worry and Anxiety in Times of Economic Crisis. The first contribution to the series, written by Jörg Wiegratz, Catherine Dolan, Wangui Kimari and Mario Schmidt will detail the rationale of the series and provide necessary background information and context.
  • Urban Africa under Stress: Rethinking Economic Pressure in Cities. Written by the same four scholars, this post explains in more detail the objectives of our blog series intervention, and our observations regarding pressure as a social phenomenon in a capitalist city in the Global South. It introduces Nairobi as a city of pressure and critically discusses the scholarship on economic pressure. As such, it acts as an introduction to subsequent blogs on Nairobi as a city of pressure.
  • ‘There is a Lot of Pressure on Me. It’s Like the Distance Between Heaven and Earth’ – Landscapes of Debt, Poverty-in-People and Social Atomization in Covid-19 Nairobi. Written by Mario Schmidt, Eric Kioko, Evelyn Atieno Owino, and Christiane Stephan. This post sheds light on the multidimensional ways in which Kenya’s political elite’s response to the Covid-19 pandemic has increased economic pressure on actors living in informal and low-income settlements of Nairobi (Kibera and Pipeline). It will be followed by a second post exploring the effects of the pandemic on inhabitants of Kileleshwa, a wealthier suburb of Nairobi.
  • ‘Life On These Stones Is Very Hard’ – House Helps in Covid-19 Nairobi. Written by Eric M. Kioko, Judith K. Musa, Mario Schmidt and Christiane Stephan, this blog focuses on the economic pressure experienced by women who lost jobs as house helps following the Covid-19 pandemic and how they manoeuvre their new economic situation within Nairobi’s richer suburbs.
  • “Under pressure”: negotiating competing demands and desires in a time of precarious earnings. Written by Hannah Dawson, this post examines the social and economic pressures faced by un(der)employed young men in an informal settlement on the outskirts of Johannesburg. It highlights the multiplicity of demands on young men’s precarious incomes and the tension they experience from the simultaneous pressure to consume and improve their own lives while at the same time providing for their families and children.
  • (De)pressurizing in urban centers beyond the megacity: notes on pressure from Nakuru, Kenya. Written by Nick Rahier, this post sheds light on life ‘under pressure’ from the perspective of Nakuru, a vibrant secondary Kenyan city situated 160 km Northwest of Nairobi. It presents Nakuru as a place where pressure manifests itself as a highly volatile and affective state of being that is rich in meaning about what it means to (de)pressurize beyond the megacities.
  • Less flow, more pressure: accessing water in N’Djamena in times of Covid-19. Written by Ismaël Maazaz, this blog post looks at state policies designed to mitigate the economic pressure weighting on water end-users of N’Djamena, the capital of Chad in the midst of the pandemics in 2020. Such policies adversely affected the actual pipe water pressure, generating additional challenges.
  • Inner-city pressure and living somewhere in-between. Written by Aidan Mosselson, this blog post traces the (pre-covid-19) experiences of people living in social and affordable housing in inner-city Johannesburg. Inner-city residents contend with economic pressure, as they work hard to pay their rent and often forgo other forms of social interaction whilst they strive to get by. But pressures are also more-than-economic, and emanate from difficult and unpleasant environments and concerns about safety. Combined, these pressures create a state of resignation and being in-between, of living in an undesirable area, aspiring to be elsewhere, but unable to find somewhere better and still affordable.
  • Living in the shadows of Dubai. Written by Jonathan Ngeh, this blog post draws on the lived experiences of African migrants in Dubai to shed light on how economic inequality increases pressure on low-income migrants. Furthermore, it reveals how the existence of poverty alongside wealth puts pressure on not only the poor but also on the wealthy city residents.

Blog series editors:

Jörg Wiegratz is a Lecturer in Political Economy of Global Development at the School of Politics and International Studies, University of Leeds, and Senior Research Associate, Department of Sociology, University of Johannesburg. j.wiegratz@leeds.ac.uk.

Catherine Dolan is Reader in Anthropology at SOAS, University of London. cd17@soas.ac.uk

Wangui Kimari is a Postdoctoral researcher at the African Centre for Cities, University of Cape Town. kuikimari@gmail.com

Mario Schmidt is Postdoctoral researcher at Collaborative Research Centre “Future Rural Africa” and a.r.t.e.s. Graduate School for the Humanities, University of Cologne. marioatschmidt@gmail.com

Photo by cheng feng on Unsplash

Urban Africa under Stress: Rethinking Economic Pressure in Cities

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By Jörg WiegratzCatherine Dolan, Wangui Kimari and Mario Schmidt

Research on economic pressure in Africa has been approached from diverse vantage points.  While economists frame ‘pressure’ as a consequence of market failures, or as a by-product of macro-economic measures such as structural adjustment reforms or technological and political change, anthropologists who zoom in on the economic pressures individuals face in their everyday lives, i.e. the lived experiences of those who are ‘under pressure’ have focused more on topics such as uncertainty and precarity. Alternatively, economic psychologists tend to naturalise pressure as an individual response to an adverse financial situation, eclipsing the varied ways pressure is intertwined with and shaped by broader societal transformations, power structures, social relations and obligations, and webs of exchange. There are currently no studies we are aware of that focus on the multi-faceted societal constitution of economic pressure in capitalist Africa, or that compare how pressure is experienced across gender, generation or socioeconomic groups.Read More »

Sub-Saharan countries are taking on more debt, and women will bear the brunt of repaying it

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By Matthew BarlowJean Grugel and Jessica Omukuti

By May 2020, every African nation had registered cases of COVID-19. By late July, cases had exceeded 844,000. A key factor in Africa’s struggle to mount a response to the pandemic (although not the only one) is that years of debt servicing have eroded states’ capacities to build strong health systems.

Research on crisis and pandemics in different parts of the world, particularly in sub-Saharan Africa (SSA), shows that countries will respond to COVID-19 in two phases – the fiscal expansion phase, which involves a series of stimulus packages, and the fiscal contraction phase, which is characterised by austerity. In the case of COVID-19, these phases will require significant levels of financing. In a region with predominantly low and narrow tax bases, debt and donor aid have become an alternative way for governments to finance state obligations. Currently average African debt-to-GDP is below the 60% (danger) threshold, which is way below the crisis levels of the 1980s and 1990s.

However, the cost of debt has exponentially increased due to low credit ratings translating into poor interest rates. By 2018, 18 SSA countries were at high risk of debt distress and governments made austerity cuts to public services to service their debt obligations. In 2018, 46 low-income countries — most of which are in SSA— were spending more on debt servicing than on healthcare. Annually, SSA countries were spending an average of $70 per capita on healthcare (supplemented with $10 external assistance), in contrast to $442 in China and an average of $3,040 in the EU.Read More »

Pandemic Discourses – A Global Contagion Demands Global Perspectives

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By Sakiko Fukuda-Parr, Manjari Mahajan, and Mark W. Frazier

As the inaugural issue of Pandemic Discourses goes online, 4.7 million cases of COVID-19 and nearly 320,000 deaths have been recorded by the World Health Organization. The waves of cases and deaths have been closely followed by mounting economic losses, leaving governments, communities, and individuals scrambling to find appropriate responses. Yet, even in this uniquely global moment, popular discourse around the pandemic has remained trapped within familiar terms.

Media coverage has to a large extent focused on experiences of the United States and Europe. The frameworks developed to respond to the pandemic have also been US/Euro-centric, frequently inward-looking and isolationist, paying scant attention to expertise, knowledge, and capacities elsewhere. The experiences of other parts of the world, even when taken into account, often serve to cement prior prejudices. In response to this lopsided discussion, Pandemic Discourses aims to foster a more expansive dialogue that encompasses voices from the global South, including China, India, and beyond.Read More »

A regional response to help avoid rice shortages in West Africa

Screenshot 2020-05-08 at 10.39.07As COVID-19 threatens rice imports from Asia, West Africa has an opportunity to reignite its ambitions of a regional value chain. But this would require coherence in policies and collective action.

As the COVID-19 pandemic reaches African shores, countries are grappling with questions of food security. This seems to confirm a longstanding concern among many countries to reduce their reliance on food imports. Take the example of rice in West Africa. In the Economic Community of West African States (ECOWAS) up to half of the regional rice consumption needs is met through imports. This external reliance is what led ECOWAS countries to agree to a ‘Rice Offensive’ in 2014, to boost production in the region. It is also behind the Nigerian border closures seen last year.

Regional value chains have often failed to take off because national interests trump regional agendas. But at extraordinary times like these, there is a case to give precedence to regional strategies rather than narrowly focusing on national responses.Read More »