by Elias Shilangwa and Liu Jinhai

    LUSAKA, Dec. 16 (Xinhua) -- 2008 has been an unprecedented year for Zambia. The death of President Levy Mwanawasa on Aug. 19,the first time in Zambia a sitting president died in office, shocked the nation.

    Under the pressure to hold a by-election within 90 days as the constitution calls for, the Electoral Commission of Zambia (ECZ) managed to organize the election in time.

    Four people ran in the race -- Michael Sata of the main opposition Patriotic Front (PF), Hakainde Hichilema of the United Party for National Development (UPND), Godfrey Miyanda of the Heritage Party (HP) and Rupiah Banda of the ruling Movement for Multiparty Democracy (MMD).

    The campaigns in the run-up to the election were peaceful except for pockets of skirmishes among cadres while the election day itself was also incident-free.

    With Banda's razor-thin victory in the by-election, political commentators said that the MMD has managed to cling onto power for the past 17 years because of the failure by opposition parties to unite.

    In the run-up to the election, various stakeholders appealed to the two main opposition party PF and UPND to unite and field one candidate, but they did not heed to these calls.

    Banda was elected by a margin of less than 36,000 votes, which, according to analysts, indicate that the opposition would have won if they had united.

    Sata, who came second, has since launched a court challenge and asked for a nationwide vote recount.

    However, analysts cast doubts on whether the opposition leader will get any benefits from the petition given the past experiences where petitioning of election results have always gone in favor of the ruling party.

    University of Zambia (UNZA) political analyst Dr Francis Chigunta said, instead of petitioning the results, the opposition leader should have just concentrated on organizing his party in readiness for the 2011 general elections.

    "Petitioning results is just a waste of time," Chigunta said.

    ECONOMIC DEVELOPMENT: A TOUGH TEST

    The conduction of the by-election put an end to the political uncertainties following Mwanawasa's sudden death of illness.

    But the newly-elected president and his administration are facing a tough test to continue with Mwanawasa's development legacy as a global recession looms large.

    Zambia has seen tremendous economic growth during the Mwanawasa era, with an average economic growth of more than 5 percent since 2002. Investment has also been on the upswing.

    However, the current credit crunch as well as the tumbling copper prices have placed major challenges on the new administration.

    Political and economic analyst Bob Sichinga said Zambia can not escape from the effects of the credit crisis which has hit the U.S. and European countries.

    "The stock markets globally are showing a downward trend and it is a big problem," Sichinga said, "it will impact us because investors are holding back their money."

    Zambia's foreign exchange market has been partly affected through withdrawals in foreign portfolios by investors on demand for liquidity and global risk aversion due to the global financial crisis.

    About 134 million U.S. dollars have gone out of the country since January, according to the country's central bank.

    The other challenge is the plummeting metal prices on the international market which sees the copper prices on the London Metal exchange (LME) plunge from a high of 8,000 dollars per ton in April this year to as low as 3,375 dollars per ton.

    The falling copper prices have brought a gloomy future before the new administration, as Zambia, Africa's biggest copper producer, depends on the mineral as its major foreign exchange earner.

    In the 2008 budget, the Zambian government initially projected to earn 415 million dollars in revenue from the mining sector due to new windfall taxes which were introduced early this year.

    However, with falling copper prices, analysts say Zambia will not be able to achieve some of its developmental programs outlined.

    Economic analyst Chibamba Kanyama has warned that declining copper prices will derail a lot of mining activities in the country.

    He said that most mining firms were operating under difficult circumstances considering escalating production costs against low commodity prices.

    Already, mining firms have warned of massive job cuts due to falling copper prices and reduced production. According to figures obtained, copper output has fallen by 8.8 percent to 134,769 tons during the third quarter of the year from 147,828 tons recorded in the previous quarter.

    Situmbeko Musokotwane, who replaced Ngandu Magande as finance minister, has acknowledged the mammoth task he faces in keeping the economy on a sustained path of growth.

    Musokotwane said that Zambia's economy is able to remain afloat even with the current troubled economy of the world if it attracts between 3 billion and 4 billion dollars of foreign investment every year.