By Mjumo Mzyece
On 6 February 2009, The Post newspaper of Zambia published an article about the recent award of a government contract to RP Capital Partners (Cayman Islands) Limited. The contract was to undertake a valuation of the assets of Zambia Telecommunications Company Limited (ZAMTEL), the state-owned telecommunications operator, as a precursor to a subsequent privatisation of ZAMTEL.
The Post alleged that the contract had been irregularly awarded to RP Capital Partners by the Honourable Dora Siliya, MP, Zambia’s current Minister of Communications and Transport. The article ignited a firestorm of controversy and recrimination which continues, unabated, up to the present time.
Precisely how and where this firestorm will end is, as yet, unclear. However, this should not prevent the Government of the Republic of Zambia (GRZ) and the Zambian public from grappling with the important issues around the privatisation of ZAMTEL.
In particular, the issues of why ZAMTEL should be privatised and how ZAMTEL should be privatised must carefully considered.
Why should ZAMTEL be privatised?
Zambia must rank among the best qualified candidates to give the last word on the true nature of that oxymoronic beast, the state-owned enterprise. By the time the Movement for Multiparty Democracy (MMD), the current ruling party, was elected into government in 1991, Zambia had undergone decades of increasing state ownership and state control of the economy.
The result was unmitigated economic disaster. Soon after their 1991 electoral victory, the MMD embarked on a bold programme of economic deregulation, liberalisation and privatisation. The transition from a state-owned and state-controlled economy to a free market economy has not been an easy one. Nor has the transition been completed.
The Zambia Privatisation Agency (ZPA) was established in 1992 to privatise all state-owned companies, including ZAMTEL. Today, 17 years later, a fair number of these companies, including ZAMTEL, remain state-owned; dinosaurs in a kind of government-sponsored Jurassic Park. A costly experiment in avoiding extinction and avoiding the adaptation required for economic survival.
In her Ministerial statement to Parliament on 13 February 2009, prepared in response to a point of order on the engagement of RP Capital Partners, Ms. Siliya highlighted a number of very sobering facts about ZAMTEL’s current condition:
- ZAMTEL is technically insolvent with liabilities, as of December 2008, of approximately US$ 125 million, up from about US$ 100 million in January 2008. So not only are the liabilities massive, they are growing.
- 70% of ZAMTEL’s 2008 revenue of approximately US$ 49 million went towards staff-related costs. (ZAMTEL currently has a workforce of 2,623.)
- ZAMTEL had a 2008 operational expenditure shortfall of approximately US$ 17 million (which, presumably, had to be provided by the government).
- ZAMTEL experienced some significant operational difficulties in 2008, including major disruptions to international voice and non-voice services and serious industrial unrest.
To these can be added the following:
- After more than 40 years in operation, ZAMTEL has only managed to install some 90,000 fixed telephone lines. (ZAMTEL has a state-sanctioned monopoly in fixed line telephone services.) Compare the well over three million mobile telephone lines that have been installed by the three mobile phone operators (two private operators and ZAMTEL’s Cell Z) in the last 10 years. This, in itself, is a powerful object lesson in why ZAMTEL should be privatised.
- ZAMTEL also has a monopoly on international gateway services for voice traffic. (International gateway services for data traffic have already been liberalised.) It should come as no surprise that Zambia has some of the highest international call tariffs in the world. And some of the poorest quality international calls.
- ZAMTEL’s infrastructure is aging; staff retention, morale and productivity is low; and the quality of its services is generally poor.
The foregoing are, of course, merely symptoms. The disease is state-owned enterprisitis. The cure is privatisation.
It has been estimated that every 10% increase in mobile penetration in a developing country
produces a 1.2% increase in the annual GDP growth rate. In many African countries, where communications and transport infrastructure is generally poor, the full economic and social impact of such increases in telephony penetration is probably even greater. Thus the privatisation of ZAMTEL will contribute to the economic development of Zambia through increasing the penetration of telephony and other telecommunications services.
There are three objections that always tend to be raised against the privatisation of ZAMTEL.
The first objection is that ZAMTEL is a strategic asset in a strategic economic sector and should therefore not be privatised. But what does the term “strategic asset” really mean? Strategy is to do with the planning and direction of activities and resources to achieve an overall set of major objectives. So what the “strategic asset” argument is really doing is dressing up state ownership and state control in a new suit of clothes. By the criteria and reasoning of the strategic asset doctrine, there is no limit to the economic sectors that may deemed to be “strategic”: Transport is strategic; Agriculture is strategic; The media is strategic. And so is virtually any other sector of the economy.
The second objection is that the privatisation of ZAMTEL will compromise national security, since ZAMTEL currently runs the only international gateway. The apparent reasoning here is that government needs access to the international gateway for intelligence and national security purposes. As we noted earlier, ZAMTEL only has a monopoly on international gateway services for voice traffic (meaning all voice calls originating and terminating on telecommunications networks in Zambia must go through ZAMTEL’s satellite facilities at Mwembeshi earth station). International gateway services for data traffic are liberalised. Since voice calls can now be carried as data traffic in the form of Voice over Internet Protocol (VoIP) and other packet-based voice services, it is a serious mistake, as far as national or any other kind of security is concerned, to focus merely on traditional voice services. Another major problem with this objection is that it tends to ignore all the illegal or unlicensed telecommunications traffic entering and leaving Zambia. There are other ways to meet the nation’s intelligence and national security requirements on telecommunications such as lawful intercept (LI) laws and technologies.
The third objection is that if ZAMTEL is privatised, telecommunications services will not be rolled out to the rural areas, since these services are supposedly commercially unviable or unprofitable in such areas. There is one irrefutable answer to this objection: the commercial viability or profitability of an economic enterprise is not an option, it is a necessity. Any company that cannot operate profitably will not be in operation for very long (unless, of course, it happens to be state-owned, in which case government handouts can provide indefinite life support for a clinically dead patient). Without profits, no company can repay its cost of capital or generate surpluses for future investments. Any economic venture that violates the law of out-in-up-down is doomed (The law says: When your outgo exceeds your income, your upkeep will be your downfall). The correct response to an economically unviable venture is to scrap it, or otherwise redesign it so that it becomes economically viable. Interestingly, ZAMTEL’s privately owned competitors have done a pretty good job of taking telecommunications services to the rural areas. So this objection, like the previous two, is spurious.
How should ZAMTEL be privatised?
1. ZAMTEL should be fully privatised, i.e., 100% ownership should be transferred into private hands. The partial privatisation or “commercialisation” model being considered by government would be a serious mistake. We have well over a decade of empirical evidence from the Zambian telecommunications sector that clearly demonstrates that GRZ’s simultaneous roles an owner/operator (through ZAMTEL), policy maker (through the Ministry of Communications and Transport) and regulator (through the Communications Authority of Zambia (CAZ) and the Zambia Competition Commission (ZCC)) is a very bad idea. GRZ should completely withdraw from its role as an owner and operator in the telecommunications sector and focus on implementing its own declared set of policies, i.e. deregulation, liberalisation and privatisation. In addition, when we analyse all the companies that have been privatised by the ZPA and their subsequent fortunes (and misfortunes), we tend to find that those that were only partially privatised (with government retaining a “golden share”, for instance) have fared worse than those that were fully privatised.
2. ZAMTEL should be privatised in unbundled form. The company should be divided into separate operating units, each of which can be run as a viable business on its own. For example: mobile telephony; fixed telephony; terrestrial broadband transmission (including microwave transmission and optical fibre transmission); satellite services; directory services (including directory enquiries and yellow pages); Internet services; and events and training (via ZAMTEL’s conference and training college facilities). Privatising ZAMTEL in unbundled form should make the sector more competitive. How to optimally unbundle ZAMTEL is debatable. However, with a technology-neutral unified licensing regime in place, the buyers of the separate units can freely expand their service offerings into other areas. Some restrictions might be necessary to promote competition and new entrants e.g. the exclusion of the existing private mobile operators and their associates (such as parent global companies) from buying Cell Z.
3. ZAMTEL should be privatised as quickly as possible, without sacrificing integrity, transparency or efficiency. The apparent speed and urgency with which Ms. Siliya has set about the task of privatising ZAMTEL is commendable. (We should recall, in this regard, that the privatisation of ZAMTEL has been on the government’s agenda for well over a decade.) However, speed and urgency should not be allowed to trump integrity, transparency and efficiency.
4. ZAMTEL assets should be privatised using a properly designed auction. The alternative privatisation mechanism that is often used in such privatisation exercises, the so-called “beauty contest”, is frequently subject to bias, corruption and other defects, in a way that a well designed auction is not. It should be noted that the valuation exercise that has been commissioned by Ms. Siliya cannot really determine “the true value of [ZAMTEL] on the open market”. Strictly speaking, the notion of the “true value” of a telecommunications asset, or any asset for that matter, is meaningless in economic terms. If, however, Ms. Siliya was referring to the “market value”, this can only really be determined by the market itself (or, more precisely, a market itself, since differently designed markets can produce different valuations for the same good or service). Anything else is educated guesswork at best and mere speculation at worst. Take the example of the UK government’s auction of third generation (3G) mobile licenses in 2000. Prior to the auction, Her Majesty’s government worked out a total reserve price of GBP 500 million. By the end of the auction, the five 3G licenses had been sold for a total of GBP 22.5 billion. I leave it as an exercise for the reader whether this was an instance of educated guesswork or mere speculation. The valuation exercise will probably be more useful as an analysis of ZAMTEL’s assets and liabilities and a basic due diligence than as a “market valuation” exercise as such.
5. ZAMTEL assets should be privatised using a properly designed auction. Auction theory and design is a specialised field. Unless an auction is designed properly for the given scenario, it can lead to all sorts of unintended and undesirable effects such as collusion, deterrence of new entrants, “gaming” of the auction rules, and so forth. The objectives of the auction should be to: promote competition in the Zambian telecommunications sector; encourage (or at least not discourage) local participation in the sector; and get the highest prices (the proceeds of the auction can be used to settle some, or with luck all, of ZAMTEL’s huge liabilities).
6. The privatisation of ZAMTEL should be accompanied by other steps towards fully deregulating and liberalising the telecommunications sector: liberalisation of fixed line telephony; liberalisation of international gateway services for voice traffic; introduction of a unified and technology-neutral telecommunications licensing regime; and so forth.
Santayana’s Law of Repetitive Consequences states that “Those who cannot remember the past are condemned to repeat it”. The one lesson of Zambia’s economic past is surely this: Government has no business in business. That’s the lesson. But has it been learnt?
Here we go again!!
How about that?
Lets talk sense and NOT Rubbish ayi!!!
whats going on, ine dizzy nalibumuka ndi na hungover bane
imwe bane abasungu na bapwa
Bushe uli mutuntulu nangu kalilepukamo?
Jam… Ulapepa ifyamba
Talk about issues at hand and NOT Nonsence ok!
Zamtel! its a bit funny when you look at the man behind this company – Mukela. At Zawa had his boss fired, then came to Zamtel. Here too, the boss was fired. Now as a driver for Zamtel – the board is dissolved and the Minister responsible (Siliya) is in problems with the RP saga. Is there a link in all this or mere coincidences? I seek your guidance people.
Why privatise our only
I need time to read this properly. I will comment soon.
As for me I believe it will take the whole evening to understand this article. I will just wait for you to comment Nine Chale!! Then I can probably understand something. LOL
Iwe Nine Chale taulapwisha ukubelenga? @shani mudala wandi!! read for both of us!! I am reading in English and thinking in German!! Just does not make sense. I will try again. Skills mudala skills !!
Check out my comment on nambala 15. Washupa sana notuma picture tobe, ine I’ve only managed to get one ayi.
I have read it!! Iwe I will give you the Manual!!
reading in english and thinking in germany when u are Zambian bufi. Ni dobo chabe, no wonder you change your image all the time. Ask Maiko ku zed balakaka ifwya dobo nomba iwe kikara
Ni ne chale this you second picture mune. On the other one you are a woman. Are u a shemale? kikara
Read the story first before opening your mouth.You are doing nothing to advance relevant discussions that lead to nation building. This is not Facebook
The Articel does not adrress the how to privatise aspect. A good attempt to address the issues surrounding ZAMTEL but unfortunately lacks depth.
Meant to read as ‘Article’.
Mulenga, my article suggests a well designed AUCTION as the “how to privatise aspect.” I’ve outlined the broad principles. The details can be worked out in due course to deal with, among other things, some of the concerns raised in this forum.
Mulenga, my article suggests a well designed AUCTION as the “how to privatise aspect.” I’ve outlined the broad principles. The details can be worked out in due course to deal with, among other things, some of the concerns raised in this forum.
Right on, Mjumo! — Victor Chanda
Mulenga, with regard to the subject and context the Mjumo laid in this piece, I think he applied an appropriate depth for a readership that is interested almost solely in the firestorm surrounding Hon. Dora Siliya. In fact, I would go so far as to argue that Mjumo gave a much deeper perspective to the subject before he made the obvious come to the fore, i.e., that a unilateral valuation process process, however well-intended, undermines and undervalues the mechanics and systemic nature of free markets. Of course, free markets are no panacea to all ZAMTEL problems, but they remain the best alternative to the privatization process. In my humble opinion, the author nailed this one! Go MM!
…”… with regard to the subject and context that Mjumo laid …” Everything else remains constant.
I think what we need to be advocating here, as a first priority is good governance that consists of competent,efficient,strategic performance oriented leaders who have morals and ethics and have proven track records and highly educated is a plus to manage and develop our resources in Zambia. With the kind of leaders we have in Zambia even if good policies are proposed and maybe even implemented the end results always seems to be catastrophic because of the above missing virtues.
Mulenga uliku India, ngufwa ati ba gelo uko balitutemwa ala confirm mune
jam@co ur still there?
Am still there Bro!! Just trying to digest the article!! Is there anything I can do for you Bro?
just wanted to say am going now…….c-ya!
Thats fine. I wish you a nice evening. Cheers Bro
who cares , kabiye kalale
Whilst the privatisation of ZAMTEL is long overdue, the process must be transparent and maximum caution should be exercised to ensure it’s sold at the right price and to the right people. We don’t want a repeat of mistakes made over the privatisation of the mines (recall the Binani debacle…).
I agree that the process must be handled carefully and transparently and say so in the article. A fully transparent process will act as a deterrent to shady parties who might want to use ZAMTEL for less than honourable purposes. But most auctions do have some sort of pre-qualification process to weed out those who might be the “wrong people”. (However, there should be safeguards to ensure the process is not manipulated to weed out the “right people”.) On the right price: well, that’s anybody’s guess. A reserve price can be put on each asset, but this may overvalue or undervalue the asset. Ultimately, the market will determine the “right” price. Also factor in all the money ZAMTEL is…
Also factor in all the money ZAMTEL is losing. Currently, these losses are on ZAMTEL’s, and therefore GRZ’s, balance sheet. As long as ZAMTEL continues in this present state, these losses will continue to grow. Therefore, the price should not just be thought of in terms of what GRZ will get paid for ZAMTEL’s assets, but also the savings from these ballooning losses.
The issue here is we have an incompetent Govt that has mismanaged this whole process of privatization resulting in the Zambian people having no confidence in privatization. The calibre of companies who have privatized the Zambian companies is much to be desired, the revenues are not being ploughed back into our country,Proffesional jobs and high paying jobs have been left to the expatriates, there has been no social responsibility by these companies. Someone needs to give at least one example where this Privatization has worked in Zambia or maybe even in Africa. The other way to go around it is let Zambians buy shares,stocks bonds etc in this company and let there be an overhaul in terms of
to have a complete overhaul in terms of employing only qualified ,competent performance oriented personnel to work in Zamtel because most of the companies together with the Govt have a lot of unqualified incompetent people working there and how do you expect Zambia to develop. Even if there is privatization as long as there are incompetent and unqualified personnel running and working in those companies it is bound not to succeed. We also need to look at Local investors who are competent and have a proven track record to invest in part of the company. God bless Zambia.
Incompetent, maybe. Okay, yes. Unqualified, no. New Zambian, may I call your attention to the fact that Zambia boasted of the intelligentsia during Chiluba’s era that saw the beginnings of privatization? Perhaps what we need to advocate instead is a strengthened govermental system–a true separation of powers that ensures, among other things, a truly independent Judiciary. Issues of malfeasance, public corruption, and general financial indiscipline crop up when laws are clearly manipulated by those strutting the proverbial corridors of power. To your point, Zambian central players, in government and the private sector alike, that business is all about sustainable profitability and…
Victor ,true there are a number of educated people who are not competent and are not performance oriented and there are also a number of educated people who are competent and are performance oriented, there are also a number of uneducated people who are competent and performance oriented and lastly there are a number of uneducated people who are not competent and are not performance oriented. So in short what is important are tangible results whether somebody is educated or not ,as long as they can deliver results far above the norm and can tap into and bring about progress and development with success in areas where no one has dared to venture in, those are the kinds of people Zambia needs
Kwena buildings in Zambia are ugly! You Zambians does anyone force you at gunpoint to put up such ugly concrete structures?
my bro, the ecomony cant allow us to put up modern buildings, every one wants to eat from the contrcat if awarded.
There are no Architects in Zed, they are all in the Diaspora! Draughtsmen do the designs! Local government cannot regulate infrastructure development!
The inner life just coincides with the way the building looks outside!! What do you expect!! Money is there but these guys have no proper Agenda. Ala bwafya!! Maintenance is something You pay to get your paperwork done and ha nothing to do with the actual meaning of the word. In other words bribes are on the top of the Agenda!!
You are right !! That Building looks like somewhere in Iraq after the War!!
Ba Mbulawa you are diverting the real issue here its not about the structure but the value zamtel has is wat matters so the quesion is shud zamtel be privatised becoz it has poor buildings? No as for me it shudnt be coz of security and the saw called investors the moment they make a small loss all they think off is pulling out we cant allow that country men
This is a rather shallow attempt to emtel.xplain why and how tp privatise zayesteding no local coys were intermtel. We are nt against its privatisation ,but rather the process, procedure and award of a contract of valuation. It could ve bn better if local audit and consultancy firms were invited to tender. Hon Dora lied to us by saying no local companies where interested to value zamtel’s assets. In this era of an economic down turn ,who can refuse such a lucrative business opprotunity?
Hey y’all ,leave my chick Dora out of all this…..u just jealous! mwandi Dora I love you sana…after the tribunal we will go buy a house on Cayman Island….just the 2 of us
At least ask Dora to resign!! Otherwise I see her joining the Rev ku prison soon.
# 9 wali pena kwena!……ha hah ha hah hah he heh heh
Ama article yalelo kwati ni thesis sure.Awe mayo kuti walungusha umunani.I will comment later.
Iwe Matworld!! The food I just eat feels like its on the left side of my body now. Ifi fima food fyabasungu. I want Nshima mudala with delele!!
Ok kepikeni mukwayi naine naya ku “club” mukukongola ko tu mosi tutatu mwe…icilaka pamukoshi
Am out…its now 18:30hrs @ zed.Am off to swallow some 4 – 6 mosi as usual(pa-nkongole)!
Drink that Mosi responsibly bro. See ya tomorrow!!
cheeeeeeers!
cheeeeeeers!
Koma iwe Jam@co sunvela. Waleta Naka Mosi. Put me a kaWhisky.
Gluco here is your Whiskey my friend. have fun.
cheers
J
Thanks Jam@co. Good night. Let me take some Whisky to assist me to have a sleep.
RB u think u ar doing the correct thing lets wait and see
Hope it will be done in good faith and the privatisation can be welcome!!! Zamtel could have well been ahead of the competitors. But it must be sold into good hands and without compromising its future!!! Waiting to observe
It took me a while, but I’ve finally read the whole report. YES, ZAMTEL is in dire straits and YES you can theoretically say privatisation is the solution but WHO is it that shall invest? Mzyece has deliberately ignored this important question. Everyone knows very well that foreigners are the only ones with the best possible means to save ZAMTEL, so If Zambians can’t invest in ZAMTEL, it simply means Zambians are not in charge of ZAMTEL.
I think you may be underestimating the degree of interest from LOCAL entrepreneurs in buying ZAMTEL. Besides, nothing stops the locals from partnering with foreigners who can bring in technical expertise or capital.
yashani bane
Nothing good will come out of privatising Zamtel (partial or full). Zamtel like many other state owned enterprises have simply been mismanaged. Its not about how and why Zamtel should go, its about developing the telecoms sector. I suspect the author of this article has some vested interest in Zamtel. In my opinion, such ideas can only come from enemies of Zambia. It seems there is a desire by some of our own to see to it that Zambia as a country is privatised. I find it immoral and iresponsible to even think of doing such a dishonorable thing. Zamtel’s management needs to change, bring in professionals who understand the true value of telecoms in the 21st century, it our backbone.
I couldn’t agree more! this article is bias. I think its been too long since MMD guys racked it big bucks. The only way is to sell the big assets the country has left. Like you say its dishonourable and very annoying!
Anonymous, the crux of my whole argument is that state ownership has not and can not work to develop the telecoms sector in Zambia. We have ample evidence of that. The fundamental problem at ZAMTEL is not the lack of competent managers and professionals (in fact, in my view, they have some of the best telecoms managers and professionals in the country).
We need to find out the root problem why Zamtel and the State has failed to manage Zamtel Competently so that we can address the real problem, let’s not just rush to privatization,do we even have one example of a company in Zambia that was privatized and is doing exceptionally well .
I agree with your analysis. look at Building society, we were once told in chiluba’s govt that Zambia national Building society is a serious loss making parastatal which should be privatised or something. management was changed and now Building society is even giving loans to Zambians at better interest rates than privately owned building societies. we need performers at Zamtel, with govt support. Zampost I think performs better than Zamtel, despite being disadvantaged in terms of asset and yet the company with better assest (Zamtel) is struggling. Zampost seems to have performers in mgt unlike Zamtel.
New Zambia/Shi Mpundu: I don’t doubt that there are some very competent and capable people in the parastatals. Nor do I doubt that some parastatal executives have been able to deliver better results than their predecessors. I think these companies and their executives would be able to deliver even better results if they were in the private sector and free of government interference. Note: I’m not suggesting that all privatised companies will thrive or even survive. Some will thrive, others won’t. That’s the nature of a free market economy. Former parastatals that doing well/OK: BP, Chilanga Cement, Hotels (Pamodzi, etc.), Zambia Breweries, Zambia Sugar, ZCBC/NIEC, and others.
Mjumo,If there are some competent people and they are being hindered by political interventions i think they need to resign on moral,ethics and intergrity grounds and give reasons to the public for their resignation, keeping quite and letting the Company go under is not a solution either because according to the public they are the incompetent ones. The companies you have given as examples of doing well after being privatized are not, most of them are no more.God bless Zambia.
This article sounds like it was written by an MMD fellow. Its all bias…
Cont’d from #17.
The west have realised just how important telecoms is in the 21st century. President Obama’s stimulus package and Britain’s “Digital Britain” are all focusing on Broadband peneration and national wide roll out. The UK prime UK said some thing like” Telecoms is as important in the 21st as infrastructure development such as roads, rail and industralisation were in the 20th century. In short telecoms is everything in our time and it will be a great shame if we can’t see this as an opportunity to develop our country. Don’t privatise Zamtel at all. The author of the article does not fully understand what strategy really means in this context. Zamtel can change the face…
The author of this article is just a waffler and lacks true substance and creative thinking. Privatisation may not be the only solution to all these problems. How about the management style, how about the business vision of the organisation, how about the emergency of competitors, etc. The author needs to look at issues as to why Zamtel has remained govt controlled. Who abuses ZAMTEL? Isn’t it the politicians who spend hours on phones and yet pay nothing?
Intelligentia, stop hating on Mjumo. I know the guy, he was my senior at School and is an extremely intelligent bloke. I agree his article should have been summarised for this blog but that said, it is well written and thought out. Only way out for Zamtel is full or partial privatisation.
LT, please sumarise your article and kindly give it some feel coz it kind of boring but the text is very informative, make it interesting
Yaba this guy does he know what a summary is?His article is just too long kwati chi speech cha kwa Rb when he opened parliament.
mulishani? have you see the teachers dance pa zed?
Ponograpgy mufwakufwala!
Especially after drinking that Mosi!!
Zamtel has not even made any attempts to expand into huge untapped markets like Angola and DRC and they want us to believe that it needs to be privatised. As far as I know Zamtel still has some of the best telecoms infrastructure in sub sahara Africa with the exception of South Africa, why would any one want to sell such assets? I suspect there are some foreign telecoms corporations that are trying to get hold of the supper assets Zamtel has and are using our unprincipled politicians as agents to hand over Zamtel to them so that the make supper profits out of it. Zamtel only uses 20% of its full capacity at Mwembeshi earth station and this current gov’t wants to sell it? This is treason.
I think u know what u talking bout…i agree with you 100%.
Things have to get better.
While the writer attempts to write sense, I find this article lacking a lot of USEFUL information and analysis.
In looking at the SECURITY issue which I have consistently referred to as a major concern in the would-be privatised ZAMTEL, the write failed to indicate the RISK of placing the communication of Zambia Airforce, Zambia Army, Zambia National Service and Zambia Intelligence Services in the hands of 100% private hands.
Brothers and sisters, this issue of privatising ZAMTEL MUST NOT be looked at in an emotional way worse still as a MONEY MAKING MISSION to profit from ZAMTEL’s existing infrastructure.
In the waste case of PRIVATISING ZAMTEL, I recommend 51% GRZ ownership…
On the issue of Security: My concern is the privatisation of civilian telecommunications. I am not advocating that the communications of the Zambian security services should be privatised. See also my comment on lawful intercept rules and technologies in the article.
Thanks for the response. My real concern is that the Zambian GRZ security wings’ systems are networked through the ZAMTEL LINKS. I know exactly what I am writing about because I have a personal connection with ZAMTEL. I can not reveal more on this information because I am under OATH through COURTS OF LAW not to reveal any sensitive communication details that pertain to the operation of or information passing through the ZAMTEL COMMUNICATION SYSTEM.
If you do not know how the SECURITY WINGS are networked through ZAMTEL, please consult more from GRZ relevant offices possibly at the Ministry of Information.
I hope this clarifies my earlier comment and useful to you and all the LT…
Maestro: Thanks for your second comment. I fully understand your concerns about the national security implications of privatising ZAMTEL. However, I think these concerns can be still be adequately addressed even in the context of a privatised ZAMTEL. It’s not impossible, as we can see from other (serious) countries where incumbent state-owned telecoms operators have been privatised.
Good and keep well.
LT why are you complicating things kanshi?
Chewe Í have an email Ad for you to use so that you have a good Pic. Just answer me and I will post the email ad which you can use. Just type it in your Mail space and the pic will appear. Let me know if you wanna try it out. Cheers
Iwe chi chewe ulishani.? uchili virgin nanomba boyi? bofya ukuboko kobe mune
Who is Mjumo Mzyece? Anbody this a snippet of Mjumos CV? Mjumo is also very interesting name
Matworld I know I am not your best of friends but please tell me where you are. My wife is not cooking anymore……..I am on Johannesburg
Njinga Yobweleka (now there’s an interesting name), Who am I? A concerned Zambian citizen. I’ve put my ideas on this important subject up for public scrutiny and discussion. It’s those ideas that are at issue, and they should stand or fall on their own merits and demerits. My CV, in this context, is irrelevant.
25. continued.
Other countries like Luxembourg have sold a few shares to the public but the STATE/GOVERNMENT has kept a large share to ensure a GREAT say and monitoring of activities of the SATELLITE COMMUNICATION company SES ASTRIUM, if the co. name is correct.
Why then MUST Zambia whose experience is that PRIVATISATION HAS FAILED THE NATION following the writer’s ‘Santayana’s Law of Repetitive Consequences states that “Those who cannot remember the past are condemned to repeat it”’ above if applied correctly and not emotionally as the writer put it as “The one lesson of Zambia’s economic past is surely this: Government has no business in business. That’s the lesson”.
I…
Oops i meant to say ….i am in Johannesburg and not on Johannesburg
JUst like the teachers you are on something LOL
If you were next to a teacher you could have been slapped, made to dig a pit and then sjambok… next-time be careful!!!
The answer is not privatization. First and foremost the reported Zamtel losses might be fictions. MMD has a ten dance of creating fictions losses for profitable state owned companies, case in point ZNOC. Therefore the first task is to establish how genuine these losses are and what factors contributed to the loss situation. I know for a fact that Indeni Refinery which is 50% privately owned and management is in the hands of the private sector partner has losses of more than US$300 millions. Both Zamtel and Indeni Refinery had health balance sheets at the end of 2001 when Mwanawasa became President. There is therefore need to investigate how Mwanawasa run these companies into such massive…
This proposed Zamtel sale could be in part to hide Mwanawasa corruption like was the case with ZANACO, ZNOC and sale of KCM for pantry US$20 million. RB should come out in the open and state what he knows about these serious issues, by covering up Mwanawasa corruption, he is assuming responsibility
its sad one day their will sale Zambian people.
LT this format is unfriendly and appeals more to a newspaper than a blogging site. My free advice, revert to previous version – it wasn’t broken so why would you want to fix it?
My heart bleeds when i hear such news of handing over our country which our fore fathers( KK)fought for with their lives.Zanaco was sold, as if it was not enough, what are we benefiting from these guys,yet what changes have these guys brought to the pipos Bank apart from control.Its so paiful to see that the only thing our MMD politicians can do is to talk bout selling of National assets for there benefit.Why are we training people if we cant use them.Take a leaf from countries like Sudan which have been at war for over 25 yrs,we still cant compete with the devlpmt going on.Some would say oil,but i object its just the leadership which has the heart for the nation,despite the war.Ba RB…….
I think the author of the article is very brave and forthright. How many of us came out and produced such piece of information to the public yet we are condemning him for having his own view point about whether to private or not to private Zamtel. He/she has invoked a talking point and we can now all see or filter sense from nonsense. That’s why in a democracy there is always compromise because no one answer is either the right or wrong one, it depends on how one advances the arguments for or against. So bros and sistas we should appreciate someone who takes time to write an article like this. Let’s ask ourselves honestly, how many of us have written a thought provoking article…
Izavuta, lets just arrest that comunications and transport girl
I detest people who think that if a state owned enterprise is failing then privatisation is the answer. This rubish that capitalist economics have peddled for a very long time. State ownership and private capital are not mutually exclusive. Infact, what the present economic crisis has shown is that 21st century economics will be partnerships between state and private capital. The state offers the advantage of stability and consumer confidence. The mistakes some countries are making is to think of more regulation on private capital. Here, even the delectable Obama is wrong. The world does not need more government but less on one hand and not no government but some. There must be a balance.
Continued…
I also want to remind ourselves how the vast majority of poor people in Zambia suffered and even died as a result of reaching the HIPC and yet it’s 2 years now, no one has asked the Govt of the day where the benefits are for the most needy in our society. Why do we have such short memories? Why are politicians all going to South Africa for Medical treatment and being treated by Zambian doctors when the people can force the Govt not to send anyone abroad for treatment but invest in our own medical facilities? Thailand PM was forced out of office a few months ago by the people. We can do it if we are not happy with RB and his govt.
Have you got any proof that our politicians and VIPs who go to Morningside kind oif clinics are treated by Zambian doctors?
This may be a falsehood that has been peddled around for so long that it has now become truth. It is not true.
I have also believed that Zambian Docs in SA treat our politicians. Thanks for questioning this issue. I hope that those who claim that in the future will be able to put down information that proves their claim!!
You are missing the point and digressing bro… What’s at stake here is misuse of taxpayers money, your money and not about proof of who treats who. Learn to follow the train of thought and don’t read between the lines. Talk about the issue and how you feel about it, how does it affect you and anyone around you. For your info in my time I had the best education and medical facilities under the KK regime and that’s why I’m in the 1st world and blessed with the job of my dreams but my heart breeds when I see misuse of public money and that’s what you should focus on bro. Your money, it doesn’t matter if you live abroad.
My brother in law is one of the doctors at that clinic….I can even give you the number of doctors from Zambia that are at Morningside.
I am only looking for facts and not emotional outbursts of un-truths. Morningside medi-clinic group is a private enterprise since 1983. You may get first class care there but even that is not accessible to every South African. Private medical care in Zambia will soon reach these standards and will it be ok then for VIPs to be treated at these facilities at tax-payer’s expence? You may not know it but Zambian taxpayers were footing the bills for UNIP VIPs treated in ZCCM hospitals while non-miners were turned away.
..now they even go for ear infection treatment abroad. Especially during printing off ballot papers shame!
Perfect move. At least you have put your point across clearly!! Then why didn’t you just explain the situation at first as you have done now?
It is not reading between the lines but reading your message as it is!! If you read your first posting then you will get my point!! Anyways Tax Payers money is a sensitive issue for that tax payer who is day in and day out struggling to make two ends meet!! Still this issue is tricky!! It may be cheaper for the politicians to fly to the South than to build up a facility at home that will lead into misery because these chaps lack funds for long term investment!! It sounds bitter but it may be economical at this point in time.
The problem with State control is that the management has never been appointed on merit. The best brains are denied the opportunity to run these enterprises because of the fix in the remuneration packages and party cadres are appointed. The boards of directors are made up of cronies. Munkombwe’s note! If you publish the boards of director lists in Zambian parastatals you will be amazed how many times the same names come up again and again. I would argue that the State must take ‘a seat’ as a shareholder with other individuals. Eventually the owner can be kicked out and bought off if he is not performing. That is what we need.
Yes it is a fact that Zamtel has done bad in many ways. If indeed it is our desire to privatize the company, let’s have at least 60% Zambian ownership. How do we proceed? My suggestion is that ALL Zambians local and abroad who have money to invest MUST purchase a share in Zamtel. Zambia’s wealth must be in Zambian hands. As for those owning shares in the company and with technical skills in Telecommunications, they can set up companies to support operations of Zamtel. An example would be custmer service, technical support, new line & equipment installation, preventative maintenace , etc. The bottom line is that we got to move forward.
I support you Nation Builder. Your contribution is positive in that it also offers alternatives rather than just criticizing. We want to read articles from responsible and concerned citizens like yourself who see the rich picture of the real world, our world (Zambia) and how best we can help out. Keep it up.
Vote Rigger most of your points are quite elementary. Very well articulated and easier to follow than the Mzyece’s lecture. Please continue… I’m reading.
Sorry, I thoight this contribution was from Vote Rigger, hence my previous comment. Anyhow, Nation biulder, the same word goes out to you. Good thought.
It is surprising that LT can host such an empty article to try and sway opinion so malignantly. The issue here is whether privatisation or not, did the process of tendering for a consultant meet the national tender board standards? The answer is no. On the issue of privatisation, the people of Zambia are saying ‘ why not modenrisation rather than privatisation. Modernisation is the better way to do it, and many countries in the world who were leading in privatisation are discovering so. Besides, look ahead into the future and you shall find that the direction the world is taking is based on a mixture of state intervention, with modernisation rather than pure market enterprise.
How much of the US$ 125m is attributable to GRZ‘s unsettled bills? If Zamtel is not viable, how could it have survived the last 40+ years of its inception? Has telecoms industry suddenly become unprofitable and irrelevant in Zambia in the 21st century? And barely 2 months after laying fiberoptic cables almost nationwide? Is the writer telling us that private companies don’t fail? How about Zambia airways here at home and the global crunch elsewhere?
There are surely some sectors of Zamtel that are making profits. Why should those be sold after unbundling? Vote Rigger makes sense when he talks about a joint venture type of arrangement. The article on the other hand seems to be…
IMO The Zambian government has a lot of work to do before it can earn the competency of successfully running national entities like ZAMTEL. Otherwise ZAMTEL will just end up becoming another ZESCO in terms of mismanagement. In both cases, a strict system of cash management is desperately needed.
” ZAMTEL should be fully privatised, i.e., 100% ownership should be transferred into private hands. ”
Whose private hands? Dan Gertler’s private hands, the Israeli diamond merchant and now miner with fast interests in the DRC, and who is behind RP Capital in the Cayman Islands? This is the question that is never answered by the government, but who are the people who are better at owning Zambia’s resources than Zambians? The Zambian government needs to get some guts, engage some management experts, create a successful business model for Zamtel and get on with it. Their only idea is to give everything away because they don’t know how to run it. The MMD needs to step aside.
” After more than 40 years in operation, ZAMTEL has only managed to install some 90,000 fixed telephone lines… Compare the well over three million mobile telephone lines that have been installed by the three mobile phone operators (two private operators and ZAMTEL’s Cell Z) in the last 10 years. ”
Wouldn’t it be better to compare the number of mobile telephone ‘lines’ put down by Zamtel with the private operators? Also, it is easy to criticize, a little more difficult to analyze. I would have like to see more (objective) criticism and analysis of ZAMTEL’s business model, and comparison with the business model proposed by it’s acquisitors. For all we know they are just asset…
MrK, It’s hard to give absolutely definitive numbers for mobile lines for several reasons (e.g. the different ways an active mobile line is defined, etc.) But the best publicly available numbers I found show that CellZ accounts for 11% (max.) of the estimated 3.7 million mobile lines in Zambia (Zain 2.7 million, MTN 0.6 million, CellZ 0.4 million). This despite the huge headstart ZAMTEL had over Zain/MTN 10 years ago. The comparing of business models is the “beauty contest” privatisation model I mentioned in the article. It is prone to bias, corruption and other vices. Whoever pays the most for ZAMTEL’s assets (assuming a well designed and executed auction) will most likely manage them…
Whoever pays the most for ZAMTEL’s assets (assuming a well designed and executed auction) will most likely manage them best.
Bad management of Zamtel and Zesco with total influence from the govt based on political appointments of senior managers as bad effect on the smooth running of these companies. Zamtel was making huge profits from 2000 – 2007 and because of govt and its party (MMD) borrowing money from these comopanies without paying back these are the results Zamtel and Zesco are facing. When people who are qualifield to run these two vital companies are given chance to run without govt interference, they will be profit making companies again. Lets remind ourselves when Mwansa was MD of Zesco , Zesco was making profits even the govt of Chiluba was able to borrow money for salaries of civil servants.
” Zamtel was making huge profits from 2000 – 2007 and because of govt and its party (MMD) borrowing money from these comopanies without paying back these are the results Zamtel and Zesco are facing. ” Excellent point. There should be a strong legal framework to shield parastatals from political influence. There is plenty of corruption and incompetence in the private sector, so that is not the issue. The same for the civil service – Zambia desperately needs a separation between the Government (politicians) and the State (civil service).
The government does not pay it’s bills that is why zamtel has gone burst
So why is the Govt going after Zambia Airways when they also are owing big amounts to Zamtel. Let this accountability be across the board to get rid of discrimination and pay back time. God bless Zambia.
Mwansa was dropped by Levy Mwanawasa and appointed his tribalmate to run Zesco. Mwansa was able to invest into the mainstream society through sponsoring activities that ordinary people benefited from. HIV and aids, football, health and education. today Zesco is badly mismanaged. The same with Zamtel. No contigent plans for the companies because my uncle has appointed me to run. These appointments are a cancer to a progressive society where opportunities are suppose to be based on qualifications and skills to run these companies. Change is what we are calling for and zambians have to be part of that change and politicians who have ruined these vital companies through interference be jailed
” Change is what we are calling for and zambians have to be part of that change and politicians who have ruined these vital companies through interference be jailed ” Interesting point. If it was illegal to appoint a relative to a management position in the civil service or a parastatal, what a different country and economy it would be. What if only the top civil servant was appointed, and everyone else had to sit exams and go through a tribunal to get appointed? That in itself would professionalize the civil service.
To: Mjumo Mzyece
I would like to make this objection – the Lusaka Times really needs to brush up on it’s quality of reporting. This article is basically a pitch for privatisation, and leaves contradictory evidence out. Like, for instance, the collapse of neoliberalism (privatisation, deregulation and ‘free markets’). I’m sorry, but any philosophy that consistently undermines wages and benefits prodcutive capital creates massive imbalances in the economy and sets up another Great Depression, as we are seeing today. Neoliberalism is a dead philosophy, and privatisation for the sake of privatisation is too.
h
Major deals like the privatisation of ZAMTEL should at least be extensively debated in parliament, with complete disclosure about what went wrong, who owns what, who the buyers would be, what the condition of sale is, etc. It cannot be another secretive affair, like all the other ‘privatisations’.
That will be the best idea. You cant tell me that they will come a time when each minister will have to call his own shots because the single sourcing act is in force. Someone is going to sell this country SOON.
This article is pretty much an MMD campaign letter. ZAMTEL does not need to be privatized. It maybe needs restructuring but definitely not privatizing. Even the British government has not fully privatized BT. The government needs to have some strategic reserves. So no to privatization.
Who cares what the damn Brits have or have not done?
#46 YOU COLOR BLINDED OR YOU ARE TALKING BLUES, WITHOUT FACTS MAN. ZESCO UNDER MWANSA WAS FAILING TO PAY WORKERS ON TIME! AT SOME POINT THE COMPANY OPTED TO PAY UNIONISED WORKERS AND PAID THOSE IN MANAGEMENT AT LATER TIME. PLEASE GET FACTS BEFORE YOU MAKE COMMENTS. ZESCO UNITED AND MALAITI RANGERS HAD TO FORM ONE TEAM. EVEN HAD TO FORM ONE TEAM PLAYERS WERE DEMORALISED AND ZESCO UNITED WAS DEMOTED TO FROM THE PREMIER DIVISION, THAT WAS THE TIME I RESIGNED FROM THE COMPNAY, AM NOW HAPPPY WHERE AM. AM TOLD THAT SALARIES ARE NOW PAID ON TIME AND ZESCO UNITED IS IN PREMIER DIVISION IF NOT AMONG THE BEST TEAMS REPRESENTING THE ZAM
It is on record sir, that MMD got some money from ZESCO under Mwansa. It was revealed in the election petition against LPM. Raping parastatals has been the order of the day for all governments from UNIP to MMD. The mentality that the party in power owns these companies has not left us… not yet.
Mjumo Mzyece Zamtel does not need a business solution nor does it need political intervention or interference.zamtel needs an engineering solution.
Mjumo,
That was a well researched articled.I hope you did not get inside info from your sister. Now look, this is not time to put companies in private hands. Look at the Global trend before you can suggest privatization. These bailout of companies in developed countries is it not to show that private enterprise has failed. If the real issue at Zamtel is management,they are a lot of qualified Zambians who can take over. If the issue is Cash, the let Zambians buy Zamtel. It should not be sould to foreigner. Let me borrow your quote: Santayana’s Law of Repetitive Consequences states that “Those who cannot remember the past are condemned to repeat it”. We messed up selling ZCCM, we are…
Mjumo,
That was a well researched articled.I hope you did not get inside info from your sister. Now look, this is not time to put companies in private hands. Look at the Global trend before you can suggest privatization. These bailout of companies in developed countries is it not to show that private enterprise has failed. If the real issue at Zamtel is management,they are a lot of qualified Zambians who can take over. If the issue is Cash, the let Zambians buy Zamtel. It should not be sold to foreigner. Let me borrow your quote: Santayana’s Law of Repetitive Consequences states that “Those who cannot remember the past are condemned to repeat it”. We messed up selling ZCCM, we are…
All the information used in the article was gathered from the public domain. The article advocates ZAMTEL be privatised, not that it should necessarily be sold to foreigners. The only point at which I said something about local versus foreign ownership was when I said one of the objectives of the auction should be to “encourage (or at least not discourage) local participation in the sector”. In some of the previous privatisations, some people in government did their best to ensure Zambian businessmen did NOT get to buy the companies on offer. Obviously, I oppose this.
This article is too shallow , unpatriotic. and onesided.In the world zamtel is not the only state owned telecomms provider ,most foreign telecomms companies suffered setbacks due to technological advancements and the loss of monopoly but these companies have come back even stronger without changing ownership.We cant afford as a country to have everything in private hands.It will really be sad to come from a country which does not own a telecomms company,airline or bank.Where will be our pride as zambians.There are some Ministies performing badly or councils ,does it mean they have to be privatised Mjumo Mzyece?
Leaders pa Zed have stopped thinking. It makes me sick why they cannot take a leaf from MTN and Zain. These companies are running telecom business which Zedians are failing to run. Why privatise Zamtel when we can run it? Ngamwafilwa kutupela because we have the knowledge and will power to make profit.
Eventually state house will be privatized because its desighn and construction bears no hand of the owners of the land.We have had president who have resided in the house they never built.Because of this they have never had a sense of ownership a sense of belonging.Their priolty is what they can gain from everything and not what they can give before time fades them out.It is not shame full to be an african but shame to see all that we can do,all the greatness bestowed in us go to worst
People just know that the guy is talking about privatisation and start commenting.Otherwise reading the whole article of his will just bore you.
Well! explained Dr. Mujumo. Lets learn from Kenya’s success story. The Kenyan Government struggled with their own “Zamtel” until they decided to privatise it. The strategy was to offer locals (citizens) an initial purchase offer (IPO). Locals lined up in extensively long queues on the first day of the IPO. Today Safaricom in Kenya the most profitable company in East and Central Africa, with annual profits reaching near to US 400 million.
Yanisokoneza arrangement iyi manje. Let me study it. Haven’t contributed since the change or is it “improvement” ba LT.
So the author of this ‘extremely shallow’ article can only see how government has failed to run parastatals in the past and not how the over a decade of ‘thinkless’ total privatisation has sank us into deeper trouble than under one party state. Its not about 100% privatisation, its all about how much stake you own in your economy. Privatisation is not the answer in a very weak economy like ours. Bailing out Zamtel and re-organising its management and operations is the best and only surefire way forward. You can not leave everything to foreigners and think that you can make progress as a nation.
Mjumo Mzyece you make wonder ,how do you say “The foregoing are, of course, merely symptoms. The disease is state-owned enterprisitis. The cure is privatisation” Does it mean we shouldnt have state owned companies in Zambia or world over?doesnt mean Zambians can never be owners of companies in their own land?Does it mean Zambians can never run parastatals?.I wouldnt be surprised if this article was written by an non Zambia
Mjumo Mzyece you make wonder ,how do you say “The foregoing are, of course, merely symptoms. The disease is state-owned enterprisitis. The cure is privatisation” Does it mean we shouldnt have state owned companies in Zambia or world over?doesnt it mean Zambians can never be owners of companies in their own land?Does it mean Zambians can never run parastatals?.I wouldnt be surprised if this article was written by an non Zambia
Pipo you are diverting the real issue here its not about the structure but the value zamtel has is wat matters so the quesion is shud zamtel be privatised becoz it has poor buildings? No as for me it shudnt be coz of security and the saw called investors the moment they make a small loss all they think off is pulling out we cant allow that country men
Mjumo Mzyece be informed that any changes that will be made by the would be owners of Zamtel to make it profitable can still be made today in Zamtel as a state owned company..,so why not effect those changes now? Zambia forever!!!!!!!!!!!!!!in poverty and wealthy,in sickness and happiness
62 you are very right! Look at western economies, certain industries still have govts involved, e.g. British Telecom, BBC, etc Reason is to maintain a stake where by the state does not find itself held to ransom by private companies, or risk security. A good case in point, are the western govts now bailing out Banks, becoz if the didn’t , their economies would collapse, in effect nationalising them again, but still running them on a commercial basis. They rely on employing the bestqualified & able, & use same principle terms used in the private sector to hire & fire, & obviously the set goals are profit making for the shareholders, Govt. Problem with our parastatals, CEO’s “r” wako ni…
52 you seem not to know much about ZESCO, this was the govts Golden Goose, that forever laid golden eggs on which the govt feasted, hence the company running into it’s own cashflow problems. Very profitable Forex wise, but would be very short of local cashflows – get the right info before making wild statements!
Ok!
People are usually scared of the unknown. The idea of privetising Zamtel is the best thing that can happen but the problem with all due respect to Dora and Banda is that we have Zambians who are the owners of this institution, who should also have a stake by buying share that should be floated on the stock exchange. This should be the the way future privetisation should be done the offer to Zambians should be mandetory before any other consideration. Share holders should then hire competent CEOs either locally or from abroad to run the company and all the other management structures put in place. the shares that dont get scooped up should then be sold to foreighn investors. Telcom in S.A etc
I think we have too many companies draining the countries treasury and therefore over burdening the tax payers. These state owned companies need to be in private hands so they can run more efficiently. No one said it has to be foreign hands. It just has to be private hands. The money that goes into bailing out these liabilities can be used elsewhere (e.g roads, artificial irrigation infrastructure,etc).
I think we should have more state owned companies in private hands…i.e
-ZNBC
-Times Of Zambia
-Dailymail Zambia
-ZAMTEL
-etc
With the exception of UTH and ZESCO of course.
Exactly what i am saying the private owners will hace get loans to suport programes and ensure they are profitable to pay back, unlike the perpetual bailout we have had for centuries.
The best solution is not privitisation but commercialisation. We cannnot expect Zamtel , Znbc and other firms you have listed to make losses when organised and operated on a commercial basis. It is well acknowledged that the songs for privatisation are ellusively composed to achieve great efficiency and minimise losses. In the Zambian history, privatisation has brought little joy than misery to majority Zambians and as usual individuals have massively profited from the dubious sale of these companies. We also remind our students and advocates of privitisation to comprehensively review what is happening to City Group of Companies (US gov thinking of nationalising ) before mo damage is done
I would include ZESCO and UTH too
a) Retirees and their pensions form the lions share of ZAMTEL’s
b) ZAMTEL owes equipment providers who were handpicked more for political reasons than technical ones
c) ZAMTEL owes ZRA partly because they are charged VAT on billing and not collection (hypothetical revenue not real revenue)
d) Govt. has persistently resisted forced retrenchments despite the need to do so
e) Govt. and the board have changed 5 managing directors in the last 5 years and all of them have been paid for the full term of their contracts
d) “Zambia has some of the highest telephone rates in the world” this assertion is complete nonsense and those who would like proof should be their email addresses
I am fed up with these usual silly Zambian games! when will we ever do something right!
I am fed up with these usual silly Zambian games! when will we ever do something right!
no
f) Despite the blind critisms ZAMTEL and Zambia has some of the BEST telecommunications infrastructure on the continent and in the region (Check the CIA factbook)
g) All of the operators that have privatized their national mobile operators have gone on to relaunch them (Examples Kenya with Kenya Telekom mobile, Botswana with BTC mobile and Telkom SA’s imminent purchase of Vodacom shares)
ZAMTEL must be free of govt interference, BT, Telkom SA, BTC Botswana are still on govt. hands. The problem is govt.’s attempts to manage ZAMTEL as a govt. dept.
ZAMTEL invested nothing between 1991 and 1998 and changes IT means they are now playing catch up. ZAMTEL should not be managed by…
Zamtel has started charging employees who went on strike in the hope of firing them, to reduce staff costs, imagine the no: of pipo out of employent and RB u ar just watching all this happen. God forbid……………
The problem with this article is that its not telling us how much the govt owes Zamtel!
finshi filechitika , blog tayiweme iyo
Musonda bushe ama slaves ninshi baletina uku bika pa in fashi sha bo. Utukope bane mwalikawata ama reg
I am confused….??
At the rate things are moving in Zambia, we might as well privatise the national assembly (Parliament) and the Presidency and turn state house into a tourist attraction.
Zamtel makes losses because of type of management,management and those who choose the management . Type of management means the mode of running organisation is wrong eg A Technician’s educational allowance is K2,500,000=00 per yr whilst Assistant Directors and above is K21million per term .On management we had Mr Mutti [from Western] who increased our salaries by 100% and still made a profit that year ,but only to be fired by Chiluba as Chiluba wanted Bwalya Chiti from Northern province . The govt contributions to the poor performance of parastatals Chiluba choose Mr Khumar as acting MD for almost six meaning massive threat occured during that time,Mwanawasa choose Mutesha was a
i dont know where we are going? with these revealations in the post that mmd companies want to be paid for services not rendered.
private companies wishing to set up businesses must use their own resources not buying cheaply infrastructure acquired at great expense using taxpayers’ cash
Mjumo. This article is spot on and only people who understand the undustry will appreciate what you are putting accross. I have noticed with sadness that some people will comment on anything even if it is not in their interest. I have picked a lot of sense from it. True, ZAMTEL needs to go immediately. Partial privatization will mean GRZ having control and indebting it further. So the way forward is 100%. Also, different enties can be run as fully fledged companies offering the service as you outlined. It is a very good article Mjumo
Mwanawasa choose Mutesha who sacked bcoz his activity. However,Dr LPM choose Simbeya . Mr Simbeya managed to put us on the right path again he was fired. currently we’ve Muyunda who has manupilate the figures of accts to convi the Board ,the state and the Dora except the M’membe,Nchito,10 NGOs and majority of Zambians. So the late Mr Mutti and Mr Simbeya managed and others failed
Bikapa in faci mune
Ba fi kala na ba tusu nsunya mwala fisa ama faces. Bikenipo tumimone kabili
Test
Tired of anything and everything about Zed.
We are a failed nation!!!
HELP. DOES ANYONE KNOW WHO IS SELLING DECRA ROOFING TILES IN ZAMBIA. EMAIL OR PHONE NO. WILL BE A BONUS. IS IT4 ROOF GOOD SUB FOR HARVEY PLEASE ADVISE
Mjomo Mzyece…who are you? What are your credentials!? Your artical is bu…?
Just to concur with those who indicated that ZAMTEL has been crippled by mismanagement and the 17 year old MMD GRZ, I would like to make mention that this is a correct position. I know of data linking the USE OF YELLOW ZAMTEL vehicles in MMD campaigns for most elections across the country ZAMBIA during the Mr FTJ Chiluba (Hon. Doc., Malawi) MMD ADMINISTRATION. I hope someone will exact details will provide actual data on this revelation.
For this reason, I do believe that ZAMTEL can still run as a parastatal company MAKING HUGE PROFITS along the private companies like CELTEL/ZAIN and TELECEL/MTN if only a principled management can be put in place.
HH for Presido 2011 !!
Sense Jam@co. Have you read the news about the proposal by the Undereducate MC Sata to impeach President RB Banda and his reasons for that?
Seriously, Zambia needs pragmatic and rational leadership in 2011 if we hope to have a sensible GRZ in future that will work towards seeing to it that comapnies like ZAMTEL make profits in their parastatal nature. All we need are good managements and leaderships of our comapnies and GRZ in 2011.
I hope all will see sense in voting for the only man of the moment president HH as Zambian President in 2011.
We need a radical for 2011. unlike the routine or programmed people who do the same things…. We have to change the way we run everything in order to have have real change and positive development… funding and funding without checking whether the arm is making profit… We need to rethink, redo,… Govt is like a business and leaders have to be like ‘businessmen’. Understanding how to deliver and not just stamping on the same documents for 20years without knowing why!!! Zambia is so confusing
Telecoms in Big Business. The reason Zamtel is failing is not omplicated or rocket science. Most Zamtel Staff are all under perfoming with those who cant stand the nepotism, bad management and all crap leave for greener pastures. Zambia has potential to employ more people but, instead is protected to keep incomptent characters
FEEDBACK TO L.T.
This format is not good. Reading through these contributions you find so many threads but saying the same things, because people do not read what others have said but simply start a new line to write something that has already been stated. Previously the comments were on the latest contribution. In that way, the debate moves forwards. What do other bloggers think?
I agree
” The disease is state-owned enterprisitis. The cure is privatisation. ” What is your opinion on SAUDI-ARAMCO, the now 100% state owned Saudi oil company? There is an interesting outlay of it’s history on Wikipedia. Aramco started off as a joint venture, but rather than stay in private hands, more and more shares were bought up by the Saudi government (or royal family). Certainly, that would be an example of highly successful parastatal?
Saudi Arabia and Dubai are examples of successful state enterprise. Soveriegn wealth funds are contributing to development in the gulf peninsula and improving standards of living. It is a generalisation to say privatisation is the answer to all economic ills. private equity has been known to asset strip and downsize severely by reducing the workforce.
There is nothing wrong with subsidising it it leads to employment which has social and economic benefits. On the contrary, it is important to have assets valued. Physical assets have a minimum value which the market has put on them. The seller need to know this value in advance. competition and speculation may raise the price, but min is known
Solution for any business is good strategy, adequate financing and good management. There can be a spperation between ownership and governance, and this is best achieved when there are a number of shareholders. An example close to home is the post. A number of shareholders who had more ownership rights than Mmembe were not happy with the Posts’ approach when their boss ( president at the time was critisiced). They exercised their legal rights and sold their shares. The governance i think was clear that there would be a sepparation of ownership and management policy to a certain extent. because of limited characters i am summarising a lot, but i hope the point is being made.
” There is nothing wrong with subsidising it it leads to employment which has social and economic benefits. ”
I say subsidize Zambia’s parastatals, depending on reform and performance. Every time they ask for capitalization from the state, demand that management is rotated out or at minimum, get rid of the political appointments and relatives.
There are ways to make parastatals operate flawlessly, it is just a matter of hiring the right people and creating the right incentives for efficiency and success.
Some valid points from the article above but how do you sell or auction anything off without knowing the full value. No matter how worthless/ indebted Zamtel may seem its very important that the full value of the assets and liabilities are known before you can even begin to engage prospective buyers/ investors. Coming from a finance/ banking background and having worked on a number of advisory deals both in SA and abroad, one of the biggest being the acquisition of ABSA Bank by Barclays Bank Plc it would be almost impossible for GRZ to carry out the asset valuation themselves. One cannot value their own assets, hence an external party was sought by GRZ.
Perhaps i was misunderstood., i totally agree with having the entity valued by a third party as a starting point. This should then be compared to GRZs’ valuation by their internal financial staff. There are various methodologies which should be used such as Nets assets, Earnings multiply by P/E ratio of similar comaprable companies which are quoted and would therefore have a p/e ratio, as well as discounted cashflows + a lot of goodwill+ price placed on infrastructure. This produces a range of values which will no doubt be different and may be used to guage reasonable price. Factors such as business plan committed by buyers are also very important for continuity and social responsibility.
Level-headed: Thanks for your comment. By all means, let a third party do a valuation and due diligence exercise. But this must be kept in perspective. Such an exercise will only tell us what assets and liabilities ZAMTEL has and what the *(guess)estimated* monetary value of those assets and liabilities is. Only an actual agreement of buyer and seller will give us the market price (or value) of the company as such. That was my point.
” Some valid points from the article above but how do you sell or auction anything off without knowing the full value. ”
And that is the real question – why hasn’t the GRZ valued ZAMTEL itself? Why is it relying on the valuation of RP Captital Partners Cayman Islands Plc (Dan Gertler, the Israeli diamond trader)? The problem is that this ‘company’ is valuing the asset they are going to buy. Which is ok, but if they are the only one doing any valuation, they have every incentive (and in the context of maximizing profits, may even be legally obligated to) undervalue the asset they are going to buy – a massive conflict of interest.
Also, within the context of the global Great Depression (caused by the same Free Trade theory that championed privatisation to begin with) , what is the value of real estate now anyway? I’m sure it is a lot less than it was 2 years ago, which is another way they can undervalue Zamtel before buying it.
We are we selling more of our parents and grand parents hard earned rewards? What will be left for the future?
We are we selling more of our parents and grand parents hard earned rewards? What will be left for the future??
Good question.
I think a foreign valuator would miss Zamtels most important “asset” which is the brand name. It is perhaps more valuable than the net assets as net assets at times assumes business is not going concern and therefore value may only be derived by stripping and selling the assets – not very usefull when selling a going concern as you wont sell those assets and therefore as buyer, you wont derive the value in the assets.
Guys, remember ZCCM was proudly Zambian, was managed by Zambians, but we failed to manage our own revenues from metal sales. This is what, i presume, is happening to ZAMTEL. Like ZCCM was, I personally dont believe that ZAMTEL makes losses. I want to believe that there is a mismanagement factor at play. Its sad to see such companies privitized but we have no choice at the moment. ZAMTEL must be privatized. Probably ZESCO will be next on the line, coz the way ZESCO is being managed leaves plenty ?????
Zamtel should go to private hands, mostly owned by zambians. as soon as possible.
I use 084 190 0030 to call Lusaka toll-free from South Africa!
The article is a good one though i dont agree with his main aim of the article.I dont think Zamtel should be privatised but if am to agree for it to be privatised, its just to anex other people who would like to join Zamtel to make a profit by allowing them to use the name Zamtel yet there not part of the government owned Zamtel. So what they end up doing is pay royalties.Privatisation doesnt mean all government assets/comapnies to be sold. Even in countries like Bostwana(bwp) and south Africa ESkom some are government owned and the all mine are 25% owned by government. Australia Telstra is owned by government, but does have some private companies attached to it.Comeon guys dont lie to us
LT – Whilst you’ve stated Zamtels liabilities & further stressed that they increased by $25m @ end of 2008 it would be very helpful if you also stated their assets espcially the debts owed to them. They are strong rumours that govt owes them a lot. Hence I cant give my verdict on whether privatising is the solution or trying to compel govt to pay what it owes would be a better solution
if they want to privatise Zamtel not to foreigners but to Zambians only ,
What is almost always ignored when Africa is talking about PRIVITIZATION is that for Africa, it always means foreigners taking over the running of a particular industry. When AT&T was being broken up in the US, there was no foreign bidders there. When the West is talking about liberalising international gateways, they are talking about their own companies having access to the license. This article is good but it as usual, it ignores this fact. The very fact that Dora did not even think it was possible for Zambians to handle this process shows you, again, that this idea is ingrained in our minds. The Western investors know this. China has also got the insight. We continue on blind . . .
I think the ultimate burden of the Post is that Justice has not been done. Dora has erred in not following procedure. There are very few people who are saying Zamtel should not be privitized, and that it is doing well. What people are saying is that procedures layed down to prevent corruption were not followed. The end does not justify the means. This articles failure to point out that as clearly as it commends Dora for showing a sense of urgency, makes it weak. Very weak.
” What is almost always ignored when Africa is talking about PRIVITIZATION is that for Africa, it always means foreigners taking over the running of a particular industry. When AT&T was being broken up in the US, there was no foreign bidders there. ”
Right, and not only that, but the individuals showing up with money are the usual suspects. RP Capital is mainly owned by Dan Gertler, who is also in joint ‘special vehicle’ (COSAF) with Dan Steinmetz, who is the largest diamond buyer of the Oppenheimer family, who owns Anglo-American and De Beers, which was founded by Cecil Rhodes.
To think that when Zambia FULLY hands over all of its industries to foreigners, all of our problems will go is to be naive. America is right now bailing out companies and nationalising them to protect them from total collapse. What would America have done if the situation was like what this author and others espouse economic scene we should go for where all the companies are in foreign hands? Chaos. Total lack of control. Let them privitize Zamtel urgently, but not this way. Let Zambian private citizens run it.
With all the focus on privatisation and attracting foreign investors, we are confusing ownership with management. Just because a company is privately owned, does not mean it is well managed. What Zambia needs is a legal framework that protects parastatal management from political interference.
I am ashamed that instead of reading the article objectively we are just hearing a lot of abuse from people who do not know Mjumo Mzyeche. Mjumo is a very intelligent very clued up guy. He holds several post graduate degrees and has worked both in private industry and in acdemia. His epertise in the field of telecommunications is very extensive. Words like ignorant etc are out of order. Debate is fine but let us have some decorum when debating.
So why does he still believe in privatisation? When most of the world is turning away from all the neoliberal (privatisation, deregulation, free market) policies?
Can someone tell me what will happen when Zambia and Africa has a whole privatizes everything? And by privatizing I don’t merely mean private ownership of companies as opposed to the gov. ownership. That is not what it means in Africa. In Africa, it means FOREIGNERS TAKING OVER. If you don’t know or believe what I mean, take a look at the mines. Let’s take this thinking to its logical conclusion. There will not be a single significant industrial, national asset that will belong to a Zambians. Imagine UTH Foreign owned. I mean everything. Farms, etc. Anything big or economically consequential. I will immigrate.
You are right on and if at all Zambia in future gets onto the wrong side with these powerful countries where the investors are coming from then we know what is next Sanctions, the borrower is a slave to the lender, Is zambia ready to go through what Zimbabwe has gone through if for some reasons all those investors pull out.Let’s think critically before we sell our country. Strategic Citizenship empowerment is what is needed.
And when we attain this MMD’s idea of National Utopia – of having everything in FOREIGN hands – will Zambia develop? Where will it stop? When are we going to start having Zambians actually owning Zambia and its assets? What have we achieved after selling off all the mines and giving the FOREIGN INVESTORS endless tax holidays? We have nothing. NOTHING. UK has its BT. SA has its Telkom. France has its France Telecom. USA has its AT&T, Cingular, Sprint – all owned by American investors. China Telecom. China Mobile. China Unicon. – China surpassed the US last yr with the highest number of Internet users and yet all those companies I have mentioned are chinese. NTT DoCoMo in Japan.
Can someone please tell me why Africa has misunderstood the idea of PRIVATE OWNERSHIP? Private ownership is citizen’s empowerment. It does not merely mean FOREIGNERS running what gov. has failed to run. We should take our destiny in our own hands. Stop thinking these people, these foreign investors, are here to develop Zambia. Let me tell you what will happen: they will come and buy Zamtel reduce its workforce. re-organize, put in some money and start making more money which they will send home. Did I mention the tax holiday for 10 yrs the Govt will throw in? Unknowing as we are, we will look at their adverts, use their services and congratulate ourselves that the idea has worked.
You are right on.
” Can someone please tell me why Africa has misunderstood the idea of PRIVATE OWNERSHIP? Private ownership is citizen’s empowerment. It does not merely mean FOREIGNERS running what gov. ” In theory it doesn’t, but that is just theory. The reality is that 70% of the population live on less than $1/day. The people who can, for instance, afford a $500,000 license for the MFEZ zone is extremely limited to the people who already have money – not counting politicians and their relatives. And that also says a lot about how you would like to see society develop. Are we simply to benefit today’s economic elite, or do we want to spread wealth and opportunity throughout society and the country?…
Do you mean, Zambians therefore cannot buy and run Zamtel?
Do you really think the NET beneficiary from the so-called success of ZAIN and MTN is Zambia? Think again.
I’m dissappointed with the addiction to fingerpointing and exchanging insults that has gripped my fellow Zambians. I think it stems from feeding on negative statements from Sata and other opposition leaders. This young man, Mjumo Mzyece, has raised very valid points. Of course, they are disconcerting to a staunch socialist. Nevertheless, they are valid. For every month that Zamtel belongs to the government, money that should have been used to build schools and hospitals is wasted on this dying entity. We cannot afford that. Some of you are proud that Zamtel belongs to you. To what benefit? Their service sucks!
By the way, I’ve been told Mjumo has a PhD in Mobile Technology and is a…
” This young man, Mjumo Mzyece, has raised very valid points. Of course, they are disconcerting to a staunch socialist. ” It is disconcerting to anyone who reads a newspaper. The USA came very close to privatising social security, and if they had, the lives of many pensioners would be at risk. What if the company which buys the national telecommunications company goes bankrupt? Are the country’s phone and internet services going to come to a complete halt until a new buyer is found? In the UK, they tried to privatise the railway, and because there were little companies responsible for a length of track, people died. Show me a single example of a successfully privatized Zambian parastatal.
Two points the article missed to stress that explains people’s apparent disagreement with the author: 1. Procedure laid down to avoid single individuals solely deciding who to offer valuable contracts to, was not followed. 2. So far, in Zambia, privatization has not just meant transfer of govt. run entities to private hands. It has meant handing over these entities to FOREIGNERS. So people are saying does it mean handing over to foreigners is what this privatization process about? Where will it stop? Is it true that is what has happened in the West ?
Those US and UK examples are way off. You’re looking at 3 different economies, industries (if I may call it that) and circumstances. You’re also simplifying the cases. The deaths on the UK rails cannot be blamed on privatisation per se. You don’t just privatise. You have to encourage competition so that if (and I repeat, if) they are not able to turn a profit they go bankrupt and give way to other better service providers. What happened with UBZ? It would take 10-14 hrs to move from Kitwe to Lusaka. For what? National pride?! That sucked. If the new owners of (the portions of) Zamtel are not to stay afloat, others will provide the services at a higher level of service. Zamtel’s a drain!
113.2
” Do you mean, Zambians therefore cannot buy and run Zamtel? ”
Not at all – what I am saying, is that the number of people with enough money to buy these institutions is going to be very limited. If you look at the former Soviet Union after communism, it are the same communist elites who are now the new capitalist elites. They’re so few in number that you can almost predict who is going to buy it. Present day politicians instead of the former colonial corporations (like Anglo-American). Which is why I am for state ownership, especially of institutions which are part of the nation’s infrastructure and ‘the commons’. Not manufacturing and agriculture, but telco, roads,…
Private ownership is not socialism. If the case of the International Gateway for example was the case of Zamnet , Coppernet or Zesco wanting the license at a lower fee, I doubt if Zambians would be as reluctant as they are now. If privatization meant selling a portions of Zamtel to some of our own business people in the communication industry, not many Zambians would oppose the idea. What is distasteful is that in the face of the evidence that we are selling everything we have to foreigners and gaining nothing in return, some chaps purporting to have monopoly on knowledge would like us to believe otherwise.
So, does it mean that we don’t local Zambians who could have evaluated Zamtel? Does it mean we don’t have local investors with enough financial and managerial muscle to run Zamtel or portions of it? You really think Zambians for example can’t run Zamtel Online if it were sold off as an entity on its own? Cell Z. the PSTN network cutup in area portions. To a thinking nation, every problem can be solved. To those who don’t believe in Zambians taking charge of their own destiny, seeing Zambian Airways fall does not concern or worry them. Seein Arabs via (Zain) and South Africans (via MTN) make away with billions that could have belonged to a consortium of zambians business men . . .
Let me also add my two cents worth:-
1. Clean up ZAMTEL’s balance sheet, Government should take up all of ZAMTEL’s liabilities, pay all its bills and forgive all its taxes and levies. I estimate $200 million would sort this out. if we could find $100 million for a failed Meridien bailout we can find these funds.
2. Unbundle ZAMTEL into standalone profit centers and incorporate these as separate entities.
3. After doing 1, 2 and 3. Instead of selling directly into private hands, sell a chunk to the public using the Stock Exchange i.e IPO. To avoid cherry picking sell bundles of shares of each of the mini ZAMTELS.. Sell to Zambina citizens and Zambian Companies only probably 33%.
4. Sell another 66% to the public to anyone who wants shares.
5. Keep 1% golden Share for the government. When the UK sold BP in 1987 they did. Which was more strategic BP then for the UK or ZAMTEL then.
I think the people who are scared about what privatisation means have not looked on the other side of the coin. I can speak to my cousin in Malole where since the mission was built in 1893 there has never been telephone service until ZAIN put up a cell site in Mungwi several years ago. Everyone in my house has a cellphone starting with my 8 year old Grade 4 daughter to my maid. Others even have two or three. I can transfer money with Celpay anywhere in Zambia to anyone with a mobile.
All this was done by private industry not government subsidies. The most successful countries in the world are the Scandanavian countries. A judicious mix of private and public enterprise has resulted in societies which by most measures are the best in the world. Low crime, great environment, cradle to grave welfare, as well as a vibrant private sector.
State ownership in Zambia has had a decidedly mixed record and the success stories are few and far between. We have tried state ownership and it has failed. Let us try private ownership.
” State ownership in Zambia has had a decidedly mixed record and the success stories are few and far between. We have tried state ownership and it has failed. Let us try private ownership. ” Zambia started out with private ownership – the British South Africa Company of the ultimate freemarketeer, Cecil Rhodes. And that ‘worked so well’ that it led the end of British rule. The question is not state versus private ownership – the question is: how do you build a broad based middle class, that includes 90% or more of the entire population. To me, the means to that end are universal education and healthcare, individual or family land ownership through title deeds…
… and government support for SMEs. Let’s create tens of thousands of medium scale commercial farmers out of the millions of subsistence farmers. However, if privatisation of energy companies in California and ENRON’s involvement in that is anything to go by, privatisation without strong regulation does not lead to good governance. So the key is to get our governance right, not privatisation. Let’s have a constitution that creates independence and budgets for local government, and that puts a wall between the government (politicians) and the state (civil service)
By the way some people have talked of security concerns. America with far graver security concerns than US has no telecoms parastatals. A Zambian friend of mine worked at Intelsat and Intelsat carried US military traffic. Furthermore I know for a fact the President uses BGAN INMMARSAT satellite telephones. So foreign carriers are OK for the President but not for our military ? Have you guys heard of encryption, data scrambling, compression, steganography etc. ? Right now there is free encryption which even the NSA in the US can not crack. Some guy was even prosecuted for designing and creating it.
” America with far graver security concerns than US has no telecoms parastatals. ” Under George Bush, they almost sold their port security to a company in Dubai. Free trade, but only for Bush’s friends. Todays businesses exist to maximize profits, not to show efficiency, protect consumer safety or look after national security. And that is why there is a role for government, even in a capitalist economy.
You seem to be trying to solve all of Zambia’s problems based on the future of Zamtel. You cannot do that. Zamtel is not a unique part of the “nation’s infrastructure”. It is just a service provider that is failing. In this day and age, it is surprising that we are debating whether to keep Zamtel or not. Firstly, it’s costing us precious money. Secondly, it’s services are lousy. Mind you I have avoided using telecoms in Zambia as much as possible every time I visit, what with the cross lines, dropped calls, poor voice quality … I would rather use a satellite phone.
Lastly, Zambians say they want to own enterprises but they don’t have the money. Do you expect govt to just give…
” You seem to be trying to solve all of Zambia’s problems based on the future of Zamtel. You cannot do that. Zamtel is not a unique part of the “nation’s infrastructure”. It is just a service provider that is failing. In this day and age, it is surprising that we are debating whether to keep Zamtel or not. ”
Ok, in your opinion, what is the best functioning, privatized, former Zambian parastatal?
” Firstly, it’s costing us precious money. ”
There is no guarantee that selling ZAMTEL into the private sector may not cost even more money. Nor is there evidence that privatisation is the only solution.
And, I don’t trust people who believe that there is no place in business for government (neoliberals), not to abuse public resources and then turn around and say – look, government doesn’t work, we have to sell it.
” Secondly, it’s services are lousy. Mind you I have avoided using telecoms in Zambia as much as possible every time I visit, what with the cross lines, dropped calls, poor voice quality … I would rather use a satellite phone. ”
Agreed, but what evidence is there that there would be better service if ZAMTEL was privatized, versus for instance, a rewriting of the constitution to keep it and other parastatals free of political influence?
the evidence is in the fact that Celtel has replaced ZAMTEL the length and breadth of the country as the producer of a social good i.e communications and it has made a profit doing it. Under state ownership ZAMTEL has lurched from crisis and is now a terminal patient in ward E21 for ailing and dying companies.
The author of the disaster has been the same state that has failed to run it properly. Privatisation does not mean selling to foreigners. It can mean selling to the real owners us Zambians. State ownership is when the government in power pretends to own assets on our behalf and mismanages them or at least that is the Zambian experience.
Ineteresting comments. Personally i think there is nothing to sell given the numbers i have seen in my mate Mjumo’s article. Who in their right mind would want to take over such a balance sheet? Like many other previous privatisations the best we can achieve is sale of buildings and houses as there is not much in the way of goodwill, I doubt the company has been investing in the ever advancing technology as they just don’t have the capacity so its assets base will be ancient. Any Zedians outthere think they have the funds needed to turn this company around? I know the brains are there just finding a bank to lay out £200m woul be quite job in the current enviroment…..
” Ineteresting comments. Personally i think there is nothing to sell given the numbers i have seen in my mate Mjumo’s article. Who in their right mind would want to take over such a balance sheet? ” Exactly. Why is RP Capital so keen on valuing ZAMTEL, if it is such a worthless company? The reason is that ZAMTEL is extremely valuable, and should never be sold to anyone.
Brian Mulenga, ” Under state ownership ZAMTEL has lurched from crisis and is now a terminal patient in ward E21 for ailing and dying companies. ” Don’t tell me, show me. What privatized former parastatal is now a model of (corporate) governance. Apart from the fact that we’re really talking about governance in isolation to the usefulness of the company to the economy at large. We all know these privatised foreign owned companies pay no taxes, ‘repatriate’ all their profits abroad and pay as low a wage as they can get away with.
Brain-washed Zambians are consistently dodging the vital difference there is between what privatization is in Africa and what it is has been in these Developed countries they want us to blindly follow. The author of this article and those supporting blind privatization (selling of national assets to foreigners) are failing to see the fact that Zambia will not develop with all the assets controlled by foreigners. Its a better evil to have the so-called elite Zambians owning these assets than to have them “stolen” by foreigners.
Chilanga Cement. Zambia Sugar. Both still maintain all the social services, schools, clinics and football teams that they used to have when they were parastatals. They have both invested huge sums in new plant and machinery and have produced steady dividends and profits for their shareholders. Both are actually in better financial shape than when they used to be the stars of Indeco. They have been consistently profitable. Zambia Sugar has almost doubled in size while Chilanga Cement have now invested in a brand new plant which is now online.
Chilanga Cememnt still keeps its beautiful housing estate, company housing for junior staff in Musamba, a tennis club, a golf club, a swimming pool, a company clinic and a bus for children of the staff to travel to Lusaka from Chilanga 15 kilometers away.
Zambia Sugar has a housing estate, a hospital, a social club, a school catering from grades 1 to 12 and other social amenities.
Financial year ending March 31, 2007, Chilanga Cement made K54 billion profit. Zambia Sugar K101 billion. Zambia Sugar paid out K70 billion in dividends. Zambia Sugar employs over 2,500 full-time employees and an additional 4,000 part-time employeeswho are contracted during the harvesting season (April to November). The Company strives to
provide high quality services to its employees, including 2,300 housing units, five clinics, and six schools available for employees’ and their families.
Chilanga Cement have just completed a US$ 100 million dollar plant. While Zambia Sugar was also spending US$ 100 million on capital projects in 2008. Is this just repatriating profits ?
I mentioned that I am able to phone relatives in Malole, Mungwi District and Mabumba near Mansa courtesy of private enterprise and the profit motive. I can get a minibus to any major township in Lusaka at any day and any time up to about 2100 hours every day. I can buy quality meat from a Zambeef outlet in any township in Lusaka. I can travel to any provincial capital any day every day in a relatively comfortable coach. All these services are provided profitably and at an affordable cost and are of a higher quality of the shoddy state run alternatives of yesteryear. Our record when it comes to running state run enterprises is lamentable. These enterprise are a burden to us and not a service.
Brian: Clearly, one or two of our interlocutors won’t let the facts get in the way of a good story. It’s interesting that some Zambians have forgotten just how “good” a state-owned economy can be: shoddy products and services, shortages, etc. The quote at the end of my article (“Those who cannot remember the past are condemned to repeat it.”) comes from a longer passage in which Santayana argues that progress depends on retentiveness. Unless the lessons of the past are RETAINED, progress is impossible. Despite the misguided policies some nations are adopting in the wake of the global economic crisis, Zambia has already tasted the “joys” of nationalisation and the like. But can we…
Despite the misguided policies some nations are adopting in the wake of the global economic crisis, Zambia has already tasted the “joys” of nationalisation and the like. But can we remember?
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