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Western hand in ill-executed privatisation

THE media exposed an alliance between the MMD, then a pressure group-cum-political movement, and the West under which the former allegedly received US$600 million through some embassy in Pretoria, South Africa, to bankroll the democracy campaign. (Sunday Post March 26, 2006).
In that case the MMD government, under then President Frederick Chiluba, was obligated to its source of existence and power.
The English say “he who pays the piper calls the tune”. A high-ranking leader in the South African Communist Party visited Zambia at the invitation of the now defunct The Post newspaper and observed:
“The one striking feature of the Zambian society is the extent to which the structural adjustment policies pursued by the Chiluba presidency have rolled back many of the gains made during the first two decades of Zambian independence after 1964.
“We found amongst many of those we met a re-emerging nostalgia for the [Kenneth] Kaunda presidency and the advances made then in the fields of education, health and provision of other basic services.
“The Chiluba presidency privatised virtually all the state-owned enterprises, leading to massive job losses and the rolling back in the provision of education and health services in particular.’’ (Sunday Post, April 9, 2006).
The so-called investors were just interested in the expensive machinery that had been bought by the UNIP administration, which they corruptly bought for a song.
The Zambia Consumer Protection and Competition Commission (ZCPCC) report of 2002 painted a very grim picture.
It is very unlikely that Zambia’s industrial activities will ever ignite to life again.
“Most of the public companies that were sold during privatisation had their assets uprooted and transported to the parent companies of the new owners in various countries.
“Although the privatisation sale agreements addressed this scourge, the provisions were either inadequate or there was no mechanism to monitor the post-privatisation activities of the privatised companies.
“This resulted in Zambia losing the most required plants, equipment and assets that were once the backbone of its manufacturing infrastructure, including fruit processing, electricity generating equipment, motor vehicle assembling plants, mining plants and equipment as sectors affected by relocation,” ZCPCC reported.
On the other hand, if the Privatisation Agency didn’t sanction the uprooting of the industrial machinery, how did the heavy machinery pass through customs at border posts?
Didn’t they need some custom clearance to authorise their exit? There surely must have been someone in high authority who had organised and facilitated their exit. It is heart-wrenching if one visits the once hyper-active Ndola industrial area where thousands of people were employed in various industries.
Many people used to sell all kinds of merchandise, but now buildings are just empty and if one tried to rent one, the absent landlords who bought them for a shout will claim US$5,000 per month, which you are required to pay for six months in advance.
Veteran politician Sikota Wina wrote: “…over 100,000 people lost their jobs between 1992 and 1997, while the gross national product (GNP) per capita had fallen to below US$300 ranking, making Zambia one of the least developed nations in Africa with poverty levels at 83 percent.
“In 1997, Zambia had seen the closure of 105 companies and 224 firms in 1998 leading to 8,150 and 3,655 job losses, respectively.’’ (The Post, November 2, 2004).
The privatisation scandal was further highlighted by Mr Wina: “The saga of the privatisation of the mines is well documented in Francis Kaunda’s book The Selling of Family Silver, in which the author, who was the chairman of the privatisation team, describes in graphic details the mistakes which led to Binani Company, for example, being awarded Luanshya copper mine operating as Roan Antelope Mining Corporation of Zambia (RAMCOZ).”
Mr Kaunda tells of the pressure which led to the granting of Nchanga and Konkola mines to Anglo American Corporation for US$90 million, rejecting an offer of US$310 million plus committed capital expenditure of US$400 million from Kafue Consortium for a similar package. (The Post, November 2, 2004).
Former minister under MMD Dipak Patel said: “We sold ZCCM to Anglo American Plc and signed an agreement in which Anglo American got a deal better than Cecil Rhodes got in the 1880s.’’ (The Post, July 16, 2003).
An editorial comment in Zambia’s leading business magazine Solwezi Today observed: “There is no question about it: in the days when ZCCM was ZCCM, no corporate entity in Zambia was better managed and better organised.
“Even its downfall was basically a political-driven affair, which makes the dismantling of the conglomerate from 1993 onwards especially tragic. All it would have taken, if the MMD administration had been courageous enough then, was a visit to Chile where the state-run copper mining company Corporation del Cobre (CODELCO) is the world’s largest copper producer; with active engagement to rectify whatever needed to be rectified to save ZCCM.”
To be continued…
The author is Zambia Daily Mail production editor.