Building on Sand: Why President Michael Sata’s INDECO Will Flop

 E. Munshya, LLB (Hons), M.Div.

The people of Milenge say, Icikwanka bacimwena kumampalanya.” Looking at all the “amampalanya” I see no indication that the Industrial Development Company (INDECO) under the current regime will work. While the PF government is enriching its rhetoric with embellished words of utopian expansion; the foundation upon which parastatal companies are operating is shady. It is a tandem for corruption and theft. In order for Zambia to develop, we must go beyond the mere fluency of talk and do the actual shake up of the system.

There is no doubting that we are a nation of dreamers. We are a nation of hopes and of visions. We are a nation of the so-called “positive confessions”. We love to declare stuff. No day passes without the government announcing certain extraordinary measures and, with that, some grandiose promises. Since 1964, we have never lacked political pronouncements. Neither have we lacked partisan promises. And I think 50 years after independence we are tired of mere promises.

INDECO will flop - Munshya

INDECO will flop – Munshya

Our history is full of vowed economic reforms but incompatible and irrelevant action. What our governments have failed in true action, they have tried to make up with cheap talk. Their mouths have become bigger and huger than the resolve of their hands. Anybody can talk, but we need talk paired with clear action. And it is not just any action, but action truly aimed at breaking the patterns responsible for poverty. There comes a time when we must begin to question whether we must do something more than just “the say it and claim it” baloney. We must come to question the basis for our beliefs and interrogate the very foundations upon which we are seeking to build our nation. President Sata has announced that he will now revamp INDECO. He has provided for about K20, 000,000 to begin this process. Some of his ministers have claimed that this INDECO will “create up to a million jobs.” This is about 5 times the total of current government workforce in all the nine, or is it ten, provinces of Zambia.

I have read great analyses from both sides of the INDECO debate. Those supporting it claim that it is exactly what Zambia needs. Those who are against the establishment of this company have gone into figures to show just how ridiculous this idea is. I contribute to this debate. I do this not because of grandiose economic or accounting prowess. All I need to do to predict the performance of INDECO is just to look at the underlying system currently in place. Unless we resolve problems with our national system vis-à-vis parastatal companies, we will continue to repeat the same failures we have been so eloquently nursing since 1964.

President Sata can give INDECO a billion. But pumping a lot more money into INDECO does not necessarily mean that it will perform well. INDECO does not suffer from a money problem. It suffers from a systemic problem. That which is wrong with a system cannot be resolved by pumping in more money. A jackpot of millions of Kwachas cannot suddenly cure a system that is rotten by corruption and nepotism. If Sata really wants to make a difference in the industrialization of our nation, he must begin by questioning and undermining systemic deficiencies characteristic of the parastatal system. There is no shortcut.

INDECO will fail because it joins the same parastatal system and processes currently operating in Zambia. It joins the same culture of theft of corruption that came with initial parastatals of 1972. That which joins a culture of corruption will eventually itself become a part of that culture of corruption. You cannot ferment INDECO in a brewery of corruption and expect to draw from it a wellspring of fresh wine. All parastatal companies right now, are irregularly awarding contracts to ruling party loyalists. And without any systemic reform assuring us that INDECO will be any different, it is bound to fail.

Recently, a Patriotic Front sponsored newspaper reported that one of the ruling party stalwarts had 21 companies directly doing business with the Government of the Republic of Zambia. These allegations have not been proven in any court. However, if this is true, it should be worrying to anyone. Sata’s establishment of INDECO does not come with any assurance that he will make INDECO do business any differently. The Food Reserve Agency (FRA) recently confirmed that a company belonging to one of President Sata’s associates had for 2 years been engaged, without contract, to provide transportation services to FRA. Will this abuse be stopped with the establishment of INDECO? Unless a system changes, INDECO will end up awarding such dubious contracts to political sycophants.

He who is unfaithful with little will certainly be unfaithful with much. If GRZ cannot run NCZ in Kafue it is likely to fail to run INDECO in Mufulira or anywhere else. President Sata and his cabinet should have proved themselves by handling smaller companies such as NCZ before they suddenly get the enlightenment to try and do a bigger styled industrial development company. In spite of having a facility that could produce enough fertilizer for all farmers in Zambia, NCZ does not operate up to capacity because of political interference and government inefficiency. This company would be able to do well had it not been for politicians’ interference in its management and business operations. Looking at how NCZ has performed, I make a prediction that Sata’s new INDECO will face the same fate.

Zambia does not lack good managers. We do not lack educated executives or bureaucrats. What we lack are managers who can run these parastatal companies without political interference. For example, as soon as the PF government grabbed Zambia Railways from the South Africans, President Sata personally appointed a chief exective for ZRL. The position was never advertised. The outcome of that appointment has led us to court. Prof E. Clive Chirwa is today facing serious allegations of theft and corruption. Political interference, in the way parastatals operate, present prospects for inefficiency and mismanagement. I am not here suggesting that Prof Chirwa has stolen. I make no finding as to the veracity of the criminal allegations he faces. I leave it up to the learned judges. I make a discovery, however, that what Prof Chirwa is going through right now is symptomatic of a failed parastatal system debilitated by political intrusion. Based on how GRZ has run ZRL I predict that INDECO’s future is bleak.

Zambia’s worst brain drain is not necessarily what has happened to those that have left for work overseas. The greatest brain drain happens to skilled Zambians, in Zambia, once they acquire political power or when politicians appoint them. Suddenly, political paternalism dims these brightest among us. As such, with good corporate governance and a board that is at arms length from politicians, I have no doubt that INDECO might have a chance of survival. It is sad though that already ruling party loyalists are lining themselves up for management positions and, of course, for those lucrative contracts to “supply services”.

National patriotism should not be measured by how much anyone of us agrees with whimsical pronouncements of government. Regardless of how grandiose these pronouncements are. As a patriot of our nation, I call upon this government to lead the way, not by pumping money into INDECO but by first changing the culture and foundation upon which all parastatals operate. That is the only way by which we can build a great future for Zambia.

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2 comments

  • I declare that I am one of those who supports the idea of setting up SEO and being run by a vehicle such as INDECO.

    However, I agree with a number of statements you have made including that
    (a). We have dysfunctional, corrupt systems marred by political interference.
    (b). For us to succeed we should do more and drop the “say it and claim it baloney”
    (c). We need to change very culture upon which we build & do business.

    Sadily it is these very statements that have defeated the who premise for your argument against INDECO.

    What you have described as summarised in the statements I have laid our above is a nation called ZAMBIA & Its people.

    Yes Zambia, you yourself, your friends, your relatives & your colleagues are exactly what those statement describe & politicians are only a tiny reflection of all of you. The very fabric of Zambian society is corrupt across all aspect of life from teachers, police, lawyers, accountants, administrators to garden workers and maids to the judges and politicians. The only language of business you all understand is corruption, virtually little ever gets done without corruption – you that, I know that & every Zambian knows that.

    So then Zambia is corrupt and by your argument not ready to make anything work, we should basically just close shop until we can fix our Zambian society and rid it off its corrupt under-belly. Good luck with that!

    Our argument is we have to work with what we have & slowly but with resolve clean the system – it is a challenge but HISTORY informs that virtually every country on earth was once like that yet that did not stop them from making things happen even SEOs which in many countries around the world continue to be a part of public life & services. We conclude that we make a stronger argument steeped in reality & history.

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  • Reblogged this on MUNGE'S SERVICE & SUPPLY(Z) LIMITED,.

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