Privatisation hailed as a success

Zambia’s privatisation programme is the “success story of Africa” and essentially the example that everyone else on the continent is following, a source close to the programme told IRIN on Wednesday.

After seven years of privatisation, “to a certain extent it’s done, and except major utilities, we are now just a clearing up operation,” the technical expert said. With the country’s largest employer - Zambia Consolidated Copper Mines - taken out of the hands of the Zambia Privatization Agency (ZPA), the remaining major firms include a state-owned bank and insurance company and the inter-country assets of the TAZARA railway, and the Indeni refinery and pipeline jointly owned with Tanzania.

With the complexity of the negotiations ahead over the remaining utilities, the specialist said he expected a scaled-down ZPA to remain in business until the year 2001.

According to a World Bank report, few governments have been able to introduce - and keep in place - the large number of complex and demanding measures needed for effective public enterprise reforms. Among the requirements are for governments to devise policies to protect competition; establish sound regulatory frameworks; maintain transparency in transactions; ensure that resources from privatisation are put to productive use; and manage the inevitable political and social tensions that arise from reform, the report said.

But there has been criticism in Zambia over an alleged lack of transparency in the programme and government interference. An NGO officer working on advocacy issues surrounding privatisation told IRIN that her concern was the “government’s competence in handling implementation” and that “too many politicians have got involved over the heads of the technical people”. She added: “We could be wrong, but it goes to show the need for a more open flow of information.”

The accusations are forcefully rejected by the specialist: “I have heard this so often. I don’t know where the rumours are coming from, but they are totally untrue.” He said in the past three years, ZPA has taken a number of MPs, including ministers, to court and dispossessed others over their failure to make down payments on bids. “This is the most transparent privatisation programme in Africa,” he added.

Since the privatisation programme began, some 280 firms or units have been sold by the ZPA. “Very, very few of them have actually died,” the specialist said. There have, however, been inevitable lay-offs from former state-owned companies, the majority of which were technically bankrupt.

In the case of the mines, retrenchment has had a serious impact on the local economy in the central Zambian copperbelt region where the informal sector relied on the spending power of the mine workers. But, along with lay-offs have come some new jobs in the rest of the country as a result of privatisation. However, “it is very difficult to measure job losses versus job gains, and whether people have been tuned to a new way of working,” the NGO officer said.