PRIVATISATION (PART2)
Zambia as a case study, Zambia is a country blessed with the abundant natural resources; among them are the mineral wealthy ranging from copper as the mainstay of the economy and cobalt, zinc and emeralds among others. Others among the natural resources are the water resource which it is estimated that in the sub-region 40% of the water bodies are concentrated in Zambia. The free land space for agriculture and only about 20% of the land space is occupied.
During the colonial times the economy of Zambia was under the free market economy. The mining industry as the mainstay of the Zambian economy was controlled by the two private companies namely; Anglo-American corporation and the Roan Selection Trust. In the years 1960s and the 1970s due to the copper boom on the market the country under went many economic developments, such as the infrastructure development.
The state intervention started in the year 1968 when the then president announced the nationalization of the private companies. The last on the list was the nationalization of the mining industry. In the banking sector the foreign banks were not nationalized but to the contrary government came up with 3 local banks.
What made the public sector to fell? One bigger problem was the lack of competition because the economy had the monopolistic environment. Among others the inappropriate technology especially in the mining industry, the sector did not innovate with the modern and advance technology, inexperienced management, and the misappropriation of resources. On the macroeconomic front government used to subsidy companies at the expense of offering social services to the citizens. The privatization process started with the UNIP government meaning that even if UNIP had continued in government the privatization process was to go on. At the 5th Extraordinary session of the United Independence Party in the year 1990 the then president of Zambia Dr. Kenneth Kaunda announce that the public sector have run its race to the finish. In his budgetary presentation to parliament the then minister of Finance G. G. Chigaga announced to the house. “In addition, the Party and its government have decided in principle to sell off some parastatal companies. The modalities for sale are being studied, including the possibility of selling some shares to workers and members of the public”. What this shows is that the process started with the UNIP government because the economies of the world were moving to the capitalist type of economy.
Fast forward we reached the year 1991 and Zambia had a new government by the MMD, right from the very beginning the new president F.J. Chiluba announced. “As far as the privatization program is concerned there is no sacred lamb. In other words, the government is committed to total privatization of the parastatal sector.” The new minister of finance Mr. E. Kasonde announced to parliament “The MMD government has made clear its intention to promote the private sector and divest itself of investment in parastatals. In this regard, privatization will proceed expeditiously and the revenues generated will be put in a special fund to supplement the government capital budget”.
The MMD government was elected of the basis of promoting the private sector participation in the economy. From 31st October 1991 on ward parliament enacted laws that could protect the privatization process, these laws were safeguards and they were supervised by the Zambia Privatization Agency, and in case of the noncompliance it was the role of the ZPA to bring that matter forward. The land mark legislation came in 1992 when as already indicated the privatization act was passed which was Act (No; 21 of 1992 and brought about the birth of the Zambia Privatization Agency. Among others the role of the agency was to Divestiture sequencing plan which was to be approved by parliament.
By Kenneth Ngalamika.