National Assets

amtel is in focus again and alongside it are Nitrogen Chemicals, the
railway systems, and Maamba Collieries in the Southern Province.

The political arena is packed with concerns, recommendations and new
ideas for some of Zambia’s few remaining national assets.

The decision to sell 75 percent of Zamtel while is welcome to attract
new investment into the company, should not be thought of as the
proverbial automatic magic bullet that will pull the company out of
its economic doldrums.

Zambia and several other developing countries have experienced
supposedly good investors taking up equity in state enterprises with
the promise to resurrect the institution and provide the goods or
services that the company was initially set up to do. The reality is
that many such expectations were never realized as companies folded
and the assets were sold off to other countries or sent to the scrap
heap to release the land and buildings for real estate purposes.

As others have commented, Zamtel needs more than just money. It needs
a focused development plan, it needs a committed management team, it
needs a total restructuring of its services to become efficient and
relevant to the economy.

There are no guarantees that an outside investor will turn Zamtel
around for the better without a strong partnership with the people of
Zambia who must have a say in the way forward.

Zamtel has been a good catalyst for consumer protection in the mobile
telephone industry as all private service providers have had to
compete with Cell-Z and bring their local call rates down from around
60US cents per minute to the current average of 25US cents per minute.

It will be prudent for Government to put together a team of sincere
and patriotic experts to consider the partnership options for Zamtel
to avoid repetitions of experiences of the Indeni Petroleum Product
sale, the Zambia Bottlers sale, the Mansa Batteries sale, the Zamcargo
Limited sale, and many other state enterprises that punctuate the
country as sore reminders of what once was, and now is no more.

In this cut throat global economy, multinational giants eat up small
countries by buying state enterprises and closing them down so that
the entire country descends into dependency on imported goods and
services. One need only consider the expansion of South African
supermarkets on the African continent to get a glimpse of the
multinational phenomenon. These companies do not take prisoners. All
non-performing or under performing investments are soon wiped out
irrespective of the impact on the welfare of the host nation and its
people. That is just how modern business runs today; the profit margin
line dictates everything.

What options are there for Zamtel? Yes, privatize and take the risk of
previous privatization efforts is one way to go. Split the company up
into individual entities and look for strategic equity partners both
in the local economy and outside is another option. ZSIC has done this
quite successfully so far. Look for a Government to Government
financing and management agreement with a committed country is yet
another option.

Which ever option we decide to take, one thing is obvious, Zamtel will
only really turn around if there is political will, investment, and
oversight within Government to ensure that the end result is for the
benefit of the country as a whole.

There is room for a timely warning about the ongoing discussions and
negotiations with the German investors considering Njanji Commuter
Services, African Explosives looking to invest in Nitrogen Chemicals,
and the prospective investors targeting Maamba Collieries. If the
Zambian team does their work diligently and professionally then the
country will have been well served. Anything short of this will be a
recipe for another privatization disaster.

Njanji Commuter Services has the potential alleviate traffic
congestion in Lusaka and offer low cost transport to and from the city
out of the various residential suburbs. We have all seen it happen
before. NCZ offers many options for manufacturing agriculture inputs
and mining processing chemicals as has been done in past decades.
Maamba Collieries has over 100 years of coal reserves to be used as
fuel for the furnaces in the mining industry and he new steel
processing investments cropping up. All these attributes can be
realized with careful planning and management of the investment
profiles going into the various entities.

Zambia needs to attract and negotiate with investors from both in the
domestic economy and abroad with the goal of breathing new life into
our national assets that have potential to serve the economic
development needs of the country.

Special emphasis must be made about the need to sustain and grow the
national assets so that both the investors and the Zambian people can
reap the benefits of privatization.

At the end of the day the buck stops with the person with the power to
sign on the dotted line on behalf of the nation. The quality and
impact of this signature will reverberate through Zambia’s history
books and either praise a peoples hero, or as is so common, tell our
grandchildren the story of yet another plunderer in the family.

Published 4 August 2009