LUSAKA, Zambia — In his spare bungalow in central Lusaka, Fisho Mwale wears a pastel, plaid button-down and sleek, rectangular glasses. He is warm and soft-spoken. But his easy manner is camouflage; Mwale is calculating, as any man who has been both distinguished and underestimated might be.
The son of a soccer star who became foreign minister, Mwale was, for a few years, mayor of Lusaka, Zambia’s capital. One of his early business ventures was buying a London-based trade-financing company. “It was an Anglo-American corporation,” he says. “And here were these small, cheeky Africans.” The acquisition reversed the usual flow of purchasing power, from global north to south. Which is to say, Mwale is proud.
Mwale keeps his facial hair narrow and closely cropped. He wears the same goatee in a favorite old photograph, in which he and several associates revel in the high-rolling lifestyle of the early debt-swapping business, a small slice of global financing that would bring Mwale fortune and frustration.
Twenty years after the photo was taken, outrage over a deal Mwale executed for (or with, depending on whom you ask) American financier Michael Sheehan drove Mwale out of Zambia. Allegations swirled that Mwale had bribed officials to push the deal through.
The deal that Mwale helped execute made Sheehan the best-known of a small group of men who head “vulture funds” — or, as the industry prefers to call them, distressed-debt investments. These are purchases, by private investors, of sovereign debt that’s gone long unpaid. Investors say they want to “swap” that debt for local investment; critics say vultures buy debt cheaply only to sue later for much more money.
Activists and human-rights crusaders see this, essentially, as stealing from the poor to get rich, and using courts to do it. But financiers who deal in vulture funds argue that their lawsuits force accountability for national borrowing, without which credit markets would shrivel, and that their pursuit of unpaid commercial debt uncovers public corruption.
Read the rest of Jina Moore’s article, her first in her project: Zambia: Twilight of the Vulture Funds?