SOMETIME in 1968, the UNIP government implemented economic reforms aimed at putting Zambians in charge of their own economy. All sectors were affected; a law was passed to ban all foreigners and foreign-owned companies from participating in retail trading.
Major retail chains were nationalised to become state retail enterprises such as NIEC Stores, Zambia Consumer Buying Corporation (ZCBC) and Zambia National Wholesale Corporation.
Small traders were told to sale to Zambians. Many did not sale the shops however; they instead used Zambians as fronts who included some very senior government officials. The late Times of Zambia feature writer Sam Zulu investigated the scam in the early seventies and the series of articles that he wrote were headlined “Who Owns the Shop Next Door?”
Two headlines in the last few days reminded me of Sam Zulu’s wonderful investigation. The first was the headline of Thursday, May 9, 2019 “Crooks After Zambia’s Assets” under which former Minister of Finance Dr. Katele Kalumba was warning that international media are deliberating denting Zambia’s image so that the country’s assets can lose value to help vultures to buy them at very cheap prices.
The following day on Friday May 19, 2019, the headline was “KCM Takeover Looms” under which it was reported that the Zambian government was planning to take over the troubled Konkola Copper Mines because the authorities had become fed up with the unfulfilled promises of recapitalization by the mine owners Vedanta Resources of India.
The low levels of Zambian’s participation in the national economy today stem from the way that privatisation of major industries was conducted. Ownership of some of the privatised companies is very suspect and the situation is an encore of the Who Owns the Shop Next Door scam.
Let us start with Konkola Copper Mines Plc. This company which was the biggest Zambian copper industry asset at the time of its sale. It combined Nchanga, Chililabombwe and Nkonkola Deep, was first sold to Anglo American Corporation. And the whole nation was excited that Anglo American would invest in and revive KCM to its glorious past.
The opposite happened, Anglo American did nothing and they left the company without any proper handover when late UPND president Anderson Mazoka lost the Presidential elections to Levy Patrick Mwanawasa. Anglo just abandoned the asset without any explanation and the nation was thrown into panic.
I know that there were bids from very well established mining houses in the world but the government of President Levy Patrick Mwanawasa chose to sell the asset to Vedanta. At the time of sale, the asset was valued at nearly one billion United States Dollars and it had copper stocks valued at $600 million but it was sold for $25 million.
The sequence of events that took place after the sale of the mine to Vedanta. President Patrick Levy Mwanawasa stopped over in London on his way from a United Nations General Assembly to meet with bankers in the company of one Zambian businessman to discuss the syndication of a loan for Konkola Copper Mines Plc.
What in the name of God was our President doing raising money for a foreign company? What was the interest of the Zambian businessman? Who owns KCM if I ask?
I strongly suspect that Vedanta is just a front for some very slippery manipulators. They have made their money out of the mine and they want a way of pulling out. They do not have the will or even the means to raise the necessary capital to recapitalise the operations of KCM.
Government is wasting time listening to the promises of recapitalization. The company is doing the opposite; it’s killing KCM slowly. KCM used to be the top producer but it now stands at number three below Kansanshi and Lumwana.
Government should immediately take over the mine and let it become a state owned enterprise. Haven’t we Zambians learnt enough lessons from our past mistakes to be able to passionately manage a national asset that we value so much?
The world’s leading copper producing country is Chile. One of Chile’s major producers is the state copper company Codelco. Why should all the qualified Zambian mining experts fail to operate a mine given the latitude to work without interference with adequate capital and specific objectives and targets?
The current ownership of KCM Plc is hazy and the mine cannot grow under such heavy clouds. It is unfortunate the proposed investigation into the privatisation exercise is taking too long or may not even take place.
There are many other companies whose ownership or privatisation ought to be investigated.is or example, who owns Chilanga Cement now call Lafarge Cement. Inspection of records at PACRA reveals the majority shareholders in the company are Pan African Cement a company which is domiciled in Mauritius, a country which has become a tax haven for many white-collar crooks.
We were told at the time of privatisation that Chilanga Cement was sold to the Commonwealth Development Corporation and no one knows when Pan African Cement bought the CDC shares and how much the transaction cost or how much Zambia benefited if there was any benefit at all?
The same applies to the Copperbelt Energy Corporation. Recently it was announced that the CDC would buy the Copperbelt Energy Corporation. Why do shares in some of these privatised companies keep changing between the CDC and companies that are owned by people who led the privatisation exercise in the country? It boggles the mind.
The ownership of KCM must revert to Zambian hands immediately and the investigation into the privatisation scams must be undertaken with seriousness without further delay.
We cannot continue asking about the owners of the shop next door. Our country must prosper.
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