The Failure of the Parastatal Economic Model in Zambia

by Elias Munshya

There is definitely a series of stories that can be told about President Frederick Chiluba’s privatisation program. It had its own positives and its negatives. It could definitely have been done better. But privatisation, we needed to do. There was no alternative. Several of our citizens insist that those companies were “assets”. Indeed, they were. But years of political interference and party patronage had reduced all these companies to complete liabilities. In those days – in the days of Kenneth Kaunda, a ward chairman had more power over the intelligentsia of our country. The party cadres were the most prized targets for appointment to the management of all these “companies”. As a result, these companies started to survive, not on business principles, but on political considerations. In no time, the Kaunda party had to depend on borrowing to pay the salaries of these companies. Instead of becoming sources of taxes for the country, these great companies became tax spenders. And in a broke government – there only two sources of survival, massive borrowing or printing money from the Bank of Zambia. There was no way these companies were going to survive.

Again, the issue was not because these companies were not assets, but because these companies had been turned into liabilities by politics, and losses, and patronage. What was Chiluba going to do? Selling these companies was the right thing to do. And I stand with what the Chiluba government did. They did make mistakes, though. But those mistakes cannot gloss over the fact that the Zambian economy needed a complete redirection from one that depends on Kaunda and GRZ, to one that is outward and forward-looking. At least on those fronts – Chiluba did what he could.

The current government of President Lungu – is a cimbwi no plan government. It is a government that cannot learn from the past so that mistakes of the past are not repeated. Instead, this government wants to go back to the UNIP parastatal days. Already, this government, which is broke, wants to claim to buy shares of Mopani Mines in Kitwe and Mufulira. We all know that since this government loves borrowing and mismanaging things – workers in Kitwe and Mufulira will only add to the list of government workers who never receive salaries on time. As Lungu expands his parastatal state, so will the misery, confusion, borrowing. This last one – using the BOZ to print money to pay salaries (could be why the President is appointing the split-dancer to be BOZ Governor). As a result of this lack of economic management, Zambia will slowly return to the Kaunda days. Instead of going forward as a country – we are regressing back to the old ways of doing things.

Is it that we Zambians cannot run these companies? Of course, we can. Parastatals fail, not because we lack ability, but because politics become primary considerations over the business and common sense. ZCCM-IH, the last parastatal standing is controlled by PF cadres. Just recently, the President acting through his Minister fired its Chief Executive at will. Or as they call it – in the national interest. This kind of firing is a repeat and reload of the UNIP days – something we rejected in 1991. The new generation of Zambians does not know this. But the economic experiments coming from the clueless Mr Lungu are not new. They failed badly in the history of our country. And they are a recipe for failure today.

President Lungu is giving the impression that ZCCM-IH or the IDC will ensure prosperity for Zambia. Not with the current level of political interference and patronage. Just two weeks ago, President Lungu’s kampenga commandeered a Zambia Airforce plane to take sacks of money to Mongu. This kampenga is using government military resources. Now imagine with me what sort of transport he would use if, say, we had Zambia Airways? He would use those planes and in no time run them down while advancing the political objectives of the Patriotic Front party, a party whose only way to win in 2021 is to take stolen cash (or as they are calling it “donated cash”) to the far-flung areas using state resources. It is this kind of behaviour that would almost certainly assure the failure of the IDC, ZCCM-IH, Zambia Airways, or any other company where the state and the ruling party extends their tentacles.

Instead of concentrating on a blame game; and instead of lying, the Patriotic Front government needs to be channelling the future instead of regressing to the past. We all know the source of the current predicament – it is the clueless leadership of the President and his ruling party. Or as someone has rightly put it – the source of our current problems have been cooked in the same pots they cook sausages and beans. We must all be glad, then, that at least for now – Her Honour the Vice-President has recovered from COVID-19. Otherwise, a litany of fibbers was ready to pyana her using beans laced with sausages.

The author, Elias Munshya, can be reached at elias@munshyalaw.com