WE HAD THE IDEA BUT SOLD THE NATION: NOW IT IS TIME TO GROW ZAMBIANS
By Dr Charles Sinkala
FTJ Chiluba had an idea of what needed to be done for Zambia’s economy, and history must acknowledge that. He understood that the state could not continue running every mine, factory, hotel and farm at a massive loss, and that the economy needed to be liberalized to allow private capital, efficiency and global competition to drive growth.
The idea of privatisation in itself was not wrong, it was a necessary prescription at the time to stop the bleeding. Where his government failed was in failing to create a transparent, accountable and patriotic system that would realize that dream and protect national wealth in the process.
In the absence of such a system, what should have been a structured economic transformation became a fire-sale of national assets, and in that process Zambians lost billions of dollars.
Assets that were built over decades with taxpayers’ money were sold well below market value, often to briefcase investors who had no long-term interest in Zambia, who stripped the assets, closed factories and externalized profits.
The loss was threefold and devastating, we lost the immediate billions in undervalued assets, we lost future revenue streams because the mines and companies sold for a few hundred million dollars went on to generate tens of billions in profits abroad, and we lost mass employment and the entire industrial skills ecosystem that supported technical training and local communities.
That is why the word privatisation still carries a painful memory for many Zambians today, because it was not the economic theory that betrayed us but the lack of safeguards, proper valuation and performance monitoring.
What is next now cannot be about crying over what was lost, it must be about growing Zambians. This is where President Hakainde Hichilema’s grow agenda speaks not only to repairing the damage but to moving Zambia forward with purpose.
The grow agenda first repairs the foundation by restoring macroeconomic stability, debt sustainability, the rule of law and investor confidence, because without a stable environment no Zambian can grow or own anything meaningful. Then it deliberately moves Zambia forward by placing Zambians at the centre of economic growth, something that privatisation failed to do.
Growing Zambians means growing Zambian businesses through access to affordable credit and markets rather than handouts, it means growing Zambian ownership and value addition in mining so that we stop exporting raw copper and importing copper cables, it means growing Zambian human capital through free education and skills training to rebuild the employment base that was destroyed, and it means growing Zambian production from farming to manufacturing so that we create new assets for the future.
FTJ asked how do we sell what government owns, HH is now asking how do we build what Zambians will own, and that is the fundamental shift from a fire-sale to a nation-building agenda.
We had an idea without a system in the 1990s and we lost billions, we now have a chance to build a system that ensures Zambians grow and own their economy for the next thirty years.
The author of this article is being very unfair to Mr. Chiluba when he in effect accusses him of being careless with the privatisation process. First, it must be realised that Zambia was broke and could not afford to subsidise parastal companies while a “structured” process was worked out. For example it was costing the government USD1-2million a day to run the mines, money the government didnot have.
The Chiluba government was under tremendous pressure from the World Bank and IMF who were providing the lifeline for the government to run.
Personally, I suffered two retrenchments from the private sector with a young family during Mr. Chiluba’s government. That we survived as a family is testament to God’s grace. Those were traumatic years.
However, Mr. Chiluba and his Minister of Finance, Mr. Penza laid the ground work that made it possible for Mr. Mwanawasa to achieve the economic gains that he did. HH is playing the same role Mr. Chiluba did and the results will be seen after he leaves office, that is if we maintain the current trajectory and are not derailed by the likes of Mr. Mundubile’s economics.