How to deal with Trump, China and debt: the African country getting it right

Battle Lines Global Health Security - Zambia & African Debt (January 7, 2026)

Key Concepts:

• Debt Restructuring: The process of renegotiating debt terms to make repayment more manageable.
• PEPFAR: The U.S. President's Emergency Plan for AIDS Relief, a major source of funding for HIV/AIDS programs in Africa.
• Transactional Aid: A shift in US aid policy towards direct deals with countries in exchange for specific benefits (e.g., access to resources).
• Great Power Competition (China vs. US): The increasing rivalry between China and the United States for influence in Africa, particularly regarding resource access.
• Bottom-up Economy: An economic approach focused on empowering local communities and small businesses.
• Mission Impossible: President Hichilema’s description of the Zambian debt situation.

1. Zambia’s Economic Turnaround & Leadership of Hakainde Hichilema

The podcast focuses on Zambia’s success story amidst a challenging period for Africa, marked by tariffs imposed by the Trump administration and significant aid cuts. President Hakainde Hichilema (Hichilema) was recently ranked #5 in The Telegraph’s World Leaders competition due to his performance in economic restructuring, debt management, and anti-corruption efforts. Zambia, a landlocked country in Southern Africa with a population of approximately 22 million (roughly twice the size of Germany), was in a dire economic state upon Hichilema’s election four years ago, described as a “basket case” and the first African nation to default on its debts during the COVID-19 pandemic.

Hichilema’s administration prioritized economic reforms, specifically tackling the “debt mountain” which was hindering growth (running at -2.8% GDP). He termed the debt as a “python wrapped around our necks,” impeding economic progress. His key objective was debt restructuring to create “headroom” for a growth agenda.

2. Debt Restructuring as a Model for Africa

Hichilema successfully renegotiated Zambia’s debt, a move considered crucial given the broader debt crisis facing the African continent. A Vatican study, conducted by a Nobel laureate economist, revealed Africa is experiencing its worst debt squeeze in decades. Zambia’s success could serve as a template for other African nations facing similar challenges. The debt restructuring freed up resources previously allocated to interest repayments, allowing for increased investment in crucial sectors like health and education.

3. Impact of Debt on African Health & Social Development

The podcast highlights the direct link between debt burdens and the ability to invest in essential services like healthcare. High debt repayments diverted funds from critical areas such as hospitals and education. Restructuring the debt has allowed Zambia to attract investment in the mining sector, creating jobs and boosting economic activity. Hichilema’s government has hired tens of thousands of teachers and eliminated fees for primary and secondary education, potentially having a significant impact on long-term development.

4. Navigating US-China Relations & Resource Competition

Zambia faces the complex challenge of balancing relationships with both the US and China, both of whom are eager to secure access to Zambia’s abundant copper reserves. Hichilema acknowledges the need to avoid alienating either power, stating, “You can’t really alienate them…you must plot this course. You must be friends with both sides without alienating them.” The global demand for copper, driven by electrification, is intensifying this competition. Hichilema aims to navigate this “tightrope” by fostering mutually beneficial relationships.

5. The Changing Landscape of US Aid & Transactional Deals

The podcast addresses the shift in US aid policy under the Trump administration, characterized by significant cuts and a move towards “transactional” aid. This involves offering aid in exchange for specific concessions, such as access to resources. Zambia is currently negotiating a potential $1.4 billion deal with the US, but discussions are focused on the terms of access to Zambia’s mining economy. Hichilema views the aid cuts as a “wake-up call,” urging African nations to take greater responsibility for their own development. He stated, “We regret the American decision. But that's their decision…it's our duty to assure our delivery to our population.”

6. The Impact of Aid Cuts & the PEPFAR Reduction

The withdrawal of US aid, particularly through PEPFAR, has significantly impacted Zambia’s HIV/AIDS programs, with 80% of the effort previously funded by US aid. While the immediate impact hasn’t been fully realized due to ongoing surveillance and Zambia’s efforts to increase its health budget, concerns remain about potential increases in deaths and infections if new funding models don’t fill the gap.

7. Mining Disaster & Environmental Concerns

A recent mining disaster at a Chinese-owned mine in Zambia, involving the release of highly toxic waste into farmland and rivers, highlighted the risks associated with increased mining activity. While Zambia expressed private frustration with China, it maintained a cautious public stance to avoid damaging the relationship. The cleanup operation is ongoing and will require years of effort, with China contributing financially.

8. Ground-Level Perspectives & Economic Realities

Despite positive macroeconomic indicators, the podcast notes that the benefits of Zambia’s economic turnaround are not yet fully felt by ordinary citizens. A cost of living crisis persists, and the impact on people’s daily lives is still debated. However, increased mining production and job creation offer promising signs of improvement.

Notable Quotes:

• Hakainde Hichilema: “We have to tackle [the debt]. And in our manifesto to the borders, we highlighted that restructure is one of our key objectives to create space to create the headroom for the growth agenda that we set ourselves.”
• Hakainde Hichilema: “If Africa grows, it will a lot of problems for European illegal migration. So it's in the interest of Europe to support the growth of Zambia and other African countries.”
• Hakainde Hichilema: “We regret the American decision. But that's their decision…it's our duty to assure our delivery to our population.”

Data & Statistics:

• Zambia’s population: 22 million
• Zambia’s land area: Twice the size of Germany
• Zambia’s GDP growth (prior to Hichilema): -2.8%
• PEPFAR funded 80% of Zambia’s HIV efforts.
• Potential US deal with Zambia: $1.4 billion

Conclusion:

Zambia, under President Hichilema, presents a rare success story in Africa, demonstrating the potential for economic recovery through debt restructuring, strategic resource management, and a pragmatic approach to international relations. While challenges remain, including the need to translate macroeconomic gains into tangible benefits for citizens and navigate the complexities of great power competition, Zambia’s experience offers valuable lessons for other African nations facing similar hurdles. The shift in US aid policy towards transactional deals presents both opportunities and risks, requiring African leaders to take greater ownership of their development agendas. The podcast emphasizes the importance of continued monitoring of these trends and the need for nuanced reporting on the evolving dynamics in Africa.