By Isaac Mwanza

Over the past few days, the country has seen an increase in headlines and newspaper editorials calling for the firing or stepping aside of the Minister of Health Dr. Chitalu Chilufya, over some corruption-related allegations, which remains allegations and still under probe. This topic is worth discussing.

Allegations and the fight against corruption

In one edition of News Diggers, the newspaper quoted an unnamed member of the Patriotic Front (PF) intimating that Dr. Chilufya is on the “wanted” list because he harbours presidential ambitions while in an editorial, the same paper asked: “Why is he (President Edgar Lungu) treating them (Ministers under investigation) like shameless morons or cadres from the streets? By subjecting his ministers to such humiliation, he is undermining his own authority.”

In his first address to Parliament on Friday, 18th September, 2015, President Edgar Lungu discussed his Government’s commitment to zero tolerance to corruption and emphatically added, “I will not protect anyone serving in public office found wanting in our anti-corruption drive. Government also remains committed to ensuring that it fulfils its obligations of protecting, respecting and fulfilling human rights.”

Since then, President Lungu has repeatedly pronounced the country’s patriotic duty to not only express outrage against corruption but to do more to combat the scourge. The President, however, gave this fight a decisive clarity during his address to Parliament on 14th September, 2019, when he said:

“The fight against corruption must be done in an honest manner, devoid of the narrow and selfish interests calculated to malign others simply because one has the platform to do so. The fight against corruption must be prosecuted with noble intentions to make our society better. But the screaming headlines of corruption propaganda may succeed to malign someone but they achieve nothing in terms of uplifting the lives of the poor and indigent of our society, the very people we swore to save and protect.”

This passage from the President’s speech summarises what is happening in the arena of the on-going fight against corruption in Zambia. First, it is only true that a number of private newspapers and opposition leaders continue to wage a relentless campaign targeting the Republican President and his inner circle, making all sorts of corruption-related allegations.

From tenders on opening up or upgrading our road network to purchase of the new presidential jet, the procurement of the infamous fire-tenders to ambulances, etc., the target of this negative narrative has been President Lungu himself, and this has been intensifying as the next general and presidential elections draw near in 2021.

Recently, those opposed to this administration have partnered with some foreign-based international entities such as the little-known Environmental Intelligence Agency (EIA), the Economic Intelligence Unit (EIU) of the Economist magazine, and now the pseudo-religious Nigerian “pastor” Seer 1 to spread propaganda on the alleged trafficking in Mukula timber, or simply to publish articles that cast negative perceptions on the Lungu administration.

Earlier, we also saw a screaming headline claiming that some member of the PF Central Committee had said Edgar Lungu’s candidacy for the Republican Presidency in 2021 would result in PF losing power in 2021. This was not taken seriously by anyone including the PF, as its Central Committee has remained united in support of President Lungu’s 2021 candidature.

Those who generate such stories, clearly aimed at rousing confusion within the PF, also coined what has been termed as “Luapula United” a fictional formation of leaders from Luapula province, allegedly seeking to oust President Lungu. The aim is to make President Lungu lose trust in, and therefore alienate some of these Luapula leaders on the unfounded perception that they are “fighting him”, to use local political jargon.

The campaign to run a negative narrative aimed at making President Lungu unpopular ahead of 2021 polls is expected to continue and even intensify with some civil society groups in the forefront, as a way to make a name for themselves and to attract financing from well-known anti-Lungu forces, both at home and abroad. They all will sing the same song of corruption or bad governance, in most cases without any foundation whatsoever, taking advantage of every opportunity that presents itself to poison the minds of the public against President Lungu and his party.

Despite these efforts which started the moment President Lungu ascended to office, it appears President Lungu has remained strong and undistracted in leading the nation. His opponents seem to have come to the conclusion that the only way to bring down President Lungu, is by targeting his lieutenants and his party rather than the man himself.

So, we now have this new song on the market on Dr. Chitalu Chilufya and a fresh attempt to use our own local institution, the Anti-Corruption Commission (ACC) as a tool to bring down Dr. Chilufya and, in the process, to tar the President with the same brush of corruption. It would appear this new round-the-circle attempt of getting at President Lungu, is being stage-managed by entities which, so far, have failed to produce the intended negative perception of President Lungu and his presidency.

The core aim of the current wave focusing on Dr. Chilufya, carries the same agenda as previous waves which were waged against a prominent PF founder member and former Cabinet minister, Chishimba Kambwili, his cabinet colleague Ronald Chitotela, former presidential aides Amos Chanda and Kaizer Zulu. The plan is simple and straightforward: delink, isolate or separate President Lungu from those who could genuinely stand by his side and defend his Presidency.

President Lungu needs to comprehend this: the current narrative targeted at his lieutenants is meant to create and sustain a public narrative aimed at painting him as running a corrupt administration and Party which should not be voted back into Government in 2021. This is being exacerbated by the subtle in-fighting within the PF. So many people who fought or have staked their necks for the PF have now decided to go silent in order to avoid getting caught in the crossing, partly because the President’s own silence leaves these loyal members unsure as to which way their leader, President Lungu, wants to go.

In my view, right or wrong, the President’s silence is unhelpful and does not encourage his PF members who are willing and ready to fight for him and their Party, and it is therefore dangerous. The uncertainty about President Lungu’s direction, is strangling the enthusiasm of the party faithfuls and could do lasting damage to the Patriotic Front party. The President needs to come out and give clear direction to the many thousands who believe in him and look to him for leadership.

What is the End Game of Antagonising the North?

Luapula and Northern Province will be critical for the re-election of President Lungu for his second term in 2021. In Eastern Zambia, despite the polarisation of the PF resulting from last intraparty elections and efforts by mutineers against Lungu (the likes of George Kanyamula Zulu and Panji Kaunda) wanting to portray as if the entire Eastern is against the President, President Lungu is still certain to win the majority votes in the East, notwithstanding that he may not win with a wider margin which ordinarily the East ought to produce, as is the case in Southern Zambia for Hakainde Hichilema’s votes. This is a fact.

But President Lungu needs to swing into action to motivate the many voters, strategic planners, thinkers and executors in the East who are, at present, not sure about the President’s future direction. He needs to boldly announce himself and call the PF party troops to battle so that they can get ready to reach the people and mobilise support in order to ensure a winning turnout at the polls. PF needs its many supporters in all its strongholds to turn up at the polling stations and cast their ballots in 2021.

The President ought to take note of the fact that there is a ploy to antagonise the North comprising of Luapula, Muchinga and Northern provinces, which form one half of the bedrock of the PF’s support base, the other half being the urban provinces on the line of rail. The President’s opponents realise that the Patriotic Front needs a resounding victory in the North in order to consolidate its power.

The President’s opponents or, perhaps more appropriately, the President’s enemies, were hoping he would dismiss the former Infrastructure minister, Ronald Chitotela and thereby alienate the people of Pambashe and Luapula generally with the claim that Lungu was ungrateful for their support. It had been hoped that this would have compounded the situation following the separation with Chishimba Kambwili and later, the departure from the Cabinet of Former Foreign Affairs minister, Harry Kalaba.

Having failed to bring about the above, the President’s enemies are now targeting the energetic Minister of Health, Dr. Chitalu Chilufya, for separation. It is being alleged that the youthful minister has taken advantage of the spotlight shining on him under the unfortunate COVID-19 pandemic, to focus on himself as a more effective leader than the President. This, of course, is completely false.

Dr. Chilufya has been in the spotlight from the day President Lungu appointed him to the Health portfolio, a role for which he is well-qualified, being a medical doctor himself. He brought his own experience of the Zambian Medical system and has used that experience to push for the implementation of the Patriotic Front’s programme to bring health services to every Zambian.

The much criticised Health Insurance scheme is in fact the brainchild of the PF’s founding President, the late Michael Chilufya Sata who introduced a pilot scheme when he, Mr. Sata, served as Minister of Health in 1995 under President the late Frederic Chiluba. Now, Dr. Chilufya’s enemies are trying to sell the health insurance scheme as some kind of evil tax and blaming it on Dr. Chilufya as a personal enrichment scheme, and that somehow, the trail leads back to President Lungu.

For the record, the National Health Insurance scheme is a life saver for our publicly funded health service and future generations will thank President Lungu for implementing it now.

What about the so-called limelight Dr. Chitalu is said to be getting from the COVID-19 fight? First, it must be understood from a policy viewpoint that leadership in the fight against this pandemic world over has been led by appropriate heads of State or Government as we see from China, Italy, South Africa, UK and USA except where a Head of State designates health officials to do so.

From a legal point of view, Zambia deals with health pandemics using three different set of laws: the Public Health Act, Chapter 295 of the Laws of Zambia, the Disaster Management Act No. 13 of 2010, and the Emergency Powers Act, Chapter 108 of the Laws of Zambia, in that order. Under the Public Health Act, the Ministry of Health takes the lead but where the President pronounces a situation as a national disaster, the Vice President and Council of Ministers takes the lead. And the pandemic can also become an emergency requiring the President to invoke emergency powers.

The author is not aware if the COVID-19 pandemic was pronounced as a national disaster. So what has been wrong with the Minister of Health leading his Health establishment in giving daily updates about COVID-19 in the absence of escalation of the situation to a national disaster or a national emergency or the Republican President asking the Minister to step aside from taking a lead?

In the grand scheme of things, the plan to destabilise President Lungu’s government by way of baseless rumours and allegations, it is clear that those behind these calls for Dr. Chilufya’s dismissal, know that each plucking of wings of the Eagle will eventually incapacitate the Eagle. This is the end game.

Is Government and its leaders that corrupt?

When one reads the daily private tabloids, one gets the impression the entire Government system has broken down. The reason? Ministers and public servants are building mansions, own posh cars, farms, night clubs, etc. This appears to send the message that ministers or civil servants cannot own a farm or build a villa in this country, from scratch. If you don’t want to be accused of stealing, stay as poor as everyone else.

But that is wrong. There are many, many people who have become millionaires in this world, who started very small. In this country, there are people who saved from their salaries and private earnings from selling chickens, vegetables, salaula, block making etc, to buy a house or buy a mini-bus. The house was put on rent and mini bus began to operate. The income from these properties or activities, multiplied the number of properties and buses until they could afford to purchase or own their current villas or mansions.

Surely, even as we call for lifestyle audit of the people in the public service, we have no basis for the assumption that our government ministers and civil servants cannot own properties. There are many private individuals, some being very prominent leaders in the official opposition, who serve as an example of how it is possible for a person who manages his or her resources prudently, to rise from a poor village boy to a millionaire.

Again, I want to reiterate what President Lungu said in his address to Parliament, that even as we come to a common cause that the scourge of corruption is not just criminal but morally reprehensible, “we must also agree on a genuine legal and awareness response to the problem, not the baseless name-calling which does nothing to the crusade but simply polarises our society between the accused and the accusers.”

The ACC has been investigating hundreds of civil servants and other public workers. In these cases, it is very rare that civil servants and public workers are made to step aside except when there is compelling evidence giving rise to fear that the investigation may be compromised if the subject of the investigation is allowed to remain in office, in which case the subject may interfere with data or evidence.

We have also had cases like the one where the Director at the Zambia Law Development Commission was investigated and prosecuted in the courts of law, the Commission itself did not ask for the director to step aside or go on forced leave during the investigation or prosecution. What then, is different with Dr. Chlufya or indeed any other minister, especially when there is nothing concrete arising from the ACC’s work so far?

We should allow the ACC and its sister investigation units do their work and when they are ready, they should ask the appointing authority to take appropriate action.

Summary

Zambia, like any other country, has a duty to protect the meagre resources it has through a relentless war against corruption. The genuine fight against corruption must be supported by all well-meaning Zambians, but this fight, as stated by President Lungu, must never be used as a scapegoat to destroy the lives of people through mudslinging.

The current calls for Dr. Chitalu Chilufya to resign or for his dismissal, in my view, amount to nothing more than a desperate attempt to sow division and discord within the higher ranks of the Patriotic Front with the aim of weakening the Party and President Lungu who has already lost a number of strong men and women to these allegations.

In our society where one is presumed innocent until proven guilty, it appears that Dr. Chitalu Chilufya and many others, are instead judged by the court of public opinion as guilty and therefore may never enjoy the presumption of innocence as guaranteed under our Republican Constitution.

Dr. Chitalu Chilufya should be encouraged to stay strong and stay on the job as he leads the fight against the fire threat posed by COVID-19; he and his team, with their colleagues at the Zambia National Health Institute, have done an outstanding job so far and Zambia remains an outstanding example of resilience in the face of a dire situation and grave challenges. The author urges President Lungu to ignore these manufactured challenges to his authority and his very position as President of this Republic.

The President of Zambia is elected by Zambians at large, not by some cabal at some dark corner meeting. President Lungu should not unduly concern himself with these made up stories of imaginary challengers; Dr. Chilufya just happens to be one of those individuals to whom hard work comes naturally, not to attract attention in the political arena.

The Zambian people demonstrated, twice in the space of 18 months, that they recognised Edgar Lungu as the man to lead this country after Michael Sata; it is my humble view that the fervour with which the Constitutional Court’s verdict was received, confirming that President Lungu was eligible to run for the presidency in 2021, demonstrated clearly that the people of Zambia have not changed their mind about President Lungu being the man for 2021. He should therefore focus on leading this country, and pay no attention to the baseless stories of imaginary challengers within his party PF. There are none.

The author, a governance activist and holder of Bachelor of Laws, is inclined to discourse on governance and legal matters

By Anthony Bwalya

The statement issued by CEC yesterday (2 June 2020) makes sad reading. For reference, two key paragraphs are included below.

“From the above events, it is abundantly clear that the GRZ has for all intents and purposes taken steps that amount to the expropriation of the CEC infrastructure and CEC is now on the brink of defaulting on all its loans borrowed from international lenders. GRZ’s actions have the full effect of taking away CEC’s commercial and property rights, and completely inhibiting the Company from taking viable business decisions, including enforcing its legal and commercial rights in the best interest of the business.

CEC takes this opportunity to advise all its investors of these actions from the GRZ that are highly detrimental to the well-being of the business and its ability to continue as a going concern.”

Before we begin to analyse this saga and what it means for the Zambian public, let’s lay out some basic facts to clear out any misconceptions:

1. CEC is a publicly owned company listed on the Lusaka Stock Exchange since 2008. It’s shareholders include in excess of 4,000 Zambians.
2. Zambians own 65% of the company with the government owning an effective 24% via ZCCM-IH. 77% of profits before tax remain in Zambia.
3. GRZ through ZCCM (24%) and Corporate tax (35%) effectively own 60% of CEC’s profits.
4. CEC’s Executive Management Team is 100% Zambian
5. They own approximately $500m in power generation, transmission, and distribution assets.
6. CEC was formed out of ZCCM’s Power Division which was privatized in 1997 and acquired by Cinergy Global Power (US) and National Grid (UK). In 2006 it underwent a Zambian Leveraged Management Buyout (MBO), which culminated in its eventual listing in 2008.
7. ZCCM and GRZ have one representative each on the Board of Directors

Has CEC been ripping off the Zambian public as claimed by the PF?

1. Since listing in 2008 and upto 2019, CEC has recorded cumulative profits before tax of $352m.
2. Of $352m in profits, CEC has recorded tax on profits of $186m.
3. Of the remaining profits after tax, CEC has paid out $172m in dividends to its shareholders, with ZCCM-IH receiving $37m
4. Therefore the Government of Zambia has effectively received 63% of all CEC’s profits since 2008 via ZRA and ZCCM.

If the Government has benefitted $223m worth of CEC’s profits, is it really fair to say they have been ripping off the Zambian public?

Over the same period Zesco has nowhere near paid the same amount in income taxes and dividends to the Government.

In fact since 2008, apart from Kansanshi Mine, no other mine in the country has paid as much in Income Tax as CEC.

If CEC was absorbed into Zesco, it would have been run unprofessionally and at a loss, resulting in no benefit for the people of Zambia. CEC, and the Bulk Supply Agreement has actually significantly benefited the people of Zambia.

 Is there any truth in the claim that CEC has been funding the opposition?

1. Under the Companies Act, any political donations need to be disclosed in the company financial statements. CEC has been audited by globally renown audit firms and no such payment has ever been identified or disclosed.
2. CEC’s largest shareholders are publicly disclosed as ZCCM-IH, Affirma Capital, Zambia Energy Corporation (Largest shareholders are disclosed publicly), Standard Chartered Securities Zambia (Nominees), and other Zambian Pension Funds. These shareholders account for 86% of the shareholding in CEC. The majority of the remaining shareholding is made up of over 4,000 Zambian Individuals and companies.
3. Based on the above structure, it is clear that if any opposition leader held any shareholding in CEC, it would be immaterial to the company for them to exert any influence over the company. Further, any dividends received would be inconsequential in the context of running a political party in Zambia.

How did we arrive here? Let’s follow the key events that led us to today:

1. Propaganda and Non-renewal of the Bulk Supply Agreement
   – There has been an ongoing campaign by the PF to paint CEC as a leech that has been ripping off the Zambian public for the past 20 years. Apparently, they are responsible for the mismanagement and consequent losses at Zesco, and have been using their profits to fund the opposition who apparently hold a significant stake in the company. Therefore it was essential for the PF that the Bulk Supply Agreement was not renewed under any circumstance, and if it was, it would be on terms that damaged the viability of CEC. Many of the public have brought into this propaganda without challenging any of the truths.
2. Illegal takeover and mismanagement of KCM
   – In June 2019, the government hastily through ZCCM-IH, without following agreed provisions of their legal obligations, began a liquidation process against KCM and took over operations. Since then, mismanagement of the mine has meant KCM’s financial woes have deepened, with the company no longer able to meet its obligations as they fall due. Prime amongst those owed was CEC, a key supplier to the mine. Since the liquidator took over, no payments had been made to CEC. It appears as if this was intentional from the onset, in order to squeeze CEC.
3. Manipulation of legislation
   – Complaints from CEC started to mount in September 2019 around the non-payment of bills from KCM, following legal action from Zesco over their unpaid portion of the debt. Under normal circumstances, CEC would’ve restricted power supply to KCM, as they have historically done over much smaller outstanding amounts. However, since this was now a Government operated entity, CEC demonstrated lenience in good faith. This was the fatal error for CEC, trusting the PF government.

Sensing that supplying KCM would eventually become unsustainable for CEC, and that they had no intentions of renewing the Bulk Supply Agreement, the government swung into action in November 2019, introducing the Electricity Bill No. 16 of 2019. The bill was rushed through parliament, with assent being received only a month later in December 2019, culminating in The Electricity Act, 2019, repealing and replacing the The Electricity Act, 1995.

One of the key clauses amended was Section 15 relating to the common carrier clause. Under the old Act, the minister only had the powers to declare transmission lines as common carrier. This would have been of no use to the PF regime as CEC controlled both transmission lines (Long Distance Electricity transport) and distribution lines (Short distance electricity transport to the end user) to its customers. It therefore conveniently added distribution lines to its range of powers under the Act. Therefore the PF was now able to direct the use of CEC’s transmission and distribution lines, on terms that they set themselves.

This is clearly an abuse of the spirit of the law, which was only originally included to be used in the event a private company held the nation’s energy supply hostage.

What does this mean for the people of Zambia?

1. Pensions and Life Savings potentially lost for 4500 Zambians who had invested in CEC, or for the hundreds of thousands for whom their pension fund had invested in CEC.
2. For the past one year, KCM has not paid for any electricity consumed, worth $142m. KCM is the largest consumer of electricity in Zambia and the Zambian public have been paying for their electricity. We have effectively been subsidising the PF governments mismanagement of KCM by giving them free electricity.
3. By KCM not paying CEC $142m, CEC consequently has not paid Zesco their portion. Therefore Zesco has also lost out on over $110m in revenue, almost 15% of their annual revenue.
4. Therefore, for every K100 you spend on electricity, K15 has been going towards subsidising operations at KCM. That is why despite excess electricity being available in the region due to Covid-19, Zesco still cannot afford to import.
5. Continued load shedding due to failure to import electricity despite more than doubling tariffs.
6. Now with Zesco taking over the supply agreement with KCM, Zesco and the public will continue to subsidise KCM’s operations and mismanagement, increasing the cost of electricity.
7. Lack of investment and maintenance in key energy infrastructure due to lack of resources at Zesco will mean crumbling infrastructure and more power faults and loadshedding.
8. Lost tax revenues from CEC due to losses incurred from poor government decisions, similar to the reality for hundreds of Zambian businesses who have been bankrupted due to the incompetence of the PF regime, and their inability to pay their arrears and obligations in a timely manner.

What does this mean for Zambia as an investment destination?

1. Reputational damage to Zambia.
2. It will be considered a nation that does not respect laws, or changes laws to suit political agendas.
3. Lower foreign direct investment as investors will not feel safe investing in a country that can unilaterally expropriate and take control of assets, for the benefit of not even the public, but a private entity.
4. Ability to renegotiate debt will be impaired as creditors will have no confidence or trust in this government.
5. The blatant interference of the government in the operations of the board of Zesco is a clear violation of the promises made to the IMF and World Bank for the independent operation of Zesco to avoid privatisation and allow Zambia to obtain HIPC Debt Relief in 2005.

 What does this tell us about the PF Government?

1. One rule for KCM and one rule for the public. If you don’t pay for your electricity, Zesco cuts the power. No negotiation. KCM equally is a private entity but hasn’t paid for electricity for a whole year, yet they are treated as a special citizen. Should citizens not be offered the same benefit?
2. They will destroy a Zambian owned company due to their myopic understanding of the business industry and economics.
3. They will destroy a Zambian owned company for their political agenda and to benefit and enrich themselves and their business associates.
4. They will spur propaganda and lies to deceive the Zambian public on their true intentions for making certain decisions.

 What about the Board of Directors of ZCCM-IH, Zesco and IDC?

1. The boards of these institutions have proven themselves to be puppets of the PF government, completely void of any independence and objectivity, rubber stamping decisions that will drive their companies into the ground. They have failed to protect the interests of their ultimate shareholders, the People of Zambia.
2. How can the board of Zesco agree to supply a customer they know has not paid for electricity for a whole year, and accounts for almost 15% of their revenue, and has no ability or plan to pay?
3. How does the board of Zesco allow the PF Cabinet and PF Central Committee interfere with their mandate to negotiate the Bulk Supply Agreement? Again, doesn’t this class them as useful idiots?
4. How can the board of ZCCM-IH completely ignore the terms of a shareholder agreement in respect of KCM, to begin liquidation proceedings, and then allow the mine to be run into the ground, destroying all shareholder value?
5. What oversight has the Board of IDC been providing to these two subsidiaries to ensure that the people of Zambia’s interests are protected?

The people of Zambia must wake up to the continued lies and deceit of this PF government which has now gone rogue. Corruption is entrenched in every action they take, and it would not be a surprise if that is their ultimate intention after bankrupting CEC. Their lack of general business and economic understanding has resulted in a catalog of poor decisions and errors, for which the public is now having to pay for.

The Board and Management of CEC must continue to protect the interest of the Zambian public as they have done so far.

The people of Zambia must stand up and protect what belongs to them. We must demand that the PF government takes a step back and allows the Boards of the respective companies to meet at a roundtable to thrash out an agreement, without any political interference. If they fail to reach consensus, let the due legal processes play out.

We must demand #AccountabilityNow and #ChangeNow.

The Copperbelt Energy Corporation has charged that the action by the Zambian government to declare its transmission and distribution lines as Common Carrier amount to the expropriation of the CEC infrastructure.

Expropriation is the action by the state or an authority of taking property from its owner for public use or benefit.

In a statement, CEC Senior Manager for Corporate Communications Chama Nsabika stated that CEC is now on the brink of defaulting on all its loans borrowed from international lenders.

“It is abundantly clear that the GRZ has for all intents and purposes taken steps that amount to expropriation of the CEC infrastructure and CEC is now on the brink of defaulting on all its loans borrowed from international lenders. GRZ’s actions have the full effect of taking away CEC’s commercial and property rights, and completely inhibiting the Company from taking viable business decisions, including enforcing its legal and commercial rights in the best interest of the business,” Mrs Nsabika said.
“CEC takes this opportunity to advise all its investors of these actions from the GRZ that are highly detrimental to the well-being of the business and its ability to continue as a going concern. Investors are notified that CEC will, in the time being, engage in dialogue with the GRZ in the hope of obtaining an amicable and equitable outcome targeted at restoring the Company’s commercial and property rights. CEC will keep all its investors fully updated.”

She said the Statutory Instrument No. 57 of 2020 (SI 57) issued by the Minister of Energy, Honourable Mathew Nkhuwa, declaring all of CEC’s distribution and transmission lines as Common Carrier came just hours before the expiry of CEC’s power supply agreement (PSA) with Konkola Copper Mines Plc (KCM), which took effect at midnight on 31 May 2020 and in the wider context of the failed negotiations for the renewal of the Bulk Supply Agreement (BSA) between CEC and ZESCO, which lapsed on 31 March 2020. Both KCM and ZESCO are, as of now, effectively controlled by the Government of the Republic of Zambia (GRZ).

CEC notes the following significant events leading to the issuance by the GRZ of SI 57:

1. 8 May 2020 – CEC institutes measures to recover debt from KCM, which has now grown to about USD144 million
2. 13 May 2020 – KCM admits its indebtedness to CEC
3. 26 May 2020 – ZESCO requests use of the CEC transmission network to supply power to its new unknown client on the Copperbelt and requests for a meeting in the first week of June 2020
4. 28 May 2020 – CEC acknowledges the ZESCO request, stating that it stands ready to start negotiations as long as the customer involved has no valid agreement with CEC and does not owe CEC money
5. 28 May 2020 – the Minister of Energy writes to CEC asking the Company to give path to ZESCO to supply power to KCM
6. 29 May 2020 – GRZ through the Minister of Energy promulgates SI 57 declaring CEC infrastructure COMMON CARRIER
7. 31 May 2020 – ERB writes CEC setting a wheeling tariff equivalent to about 30% of CEC’s current network tariff (current tariff charged for using the CEC network)

“From the above events, it is abundantly clear that the GRZ has for all intents and purposes taken steps that amount to expropriation of the CEC infrastructure and CEC is now on the brink of defaulting on all its loans borrowed from international lenders,” Mrs Nsabika said.