Plural politics in Zambia came with a mixed bag and several challenges. Among the challenges was the need to restructure the economy that had been going through trying times. The majority of Zambians today were and are still witnesses to the painful privatization process that followed at the insistence of the IMF and the World Bank. At the start of the privatization process there were very few privatization lessons that experiences could be drawn from.
The privatization of the bulk of industries that were set up by the Kaunda regime turned out to be a well orchestrated agenda in which many people stood to make personal financial gain. The privatization was conducted with much. The republican president at the time, now former president Chiluba, even came up with a term... industries should not be sold for a song. However, what transpired was all too contrary to what he professed. The majority of the industries, if not all, were sold for paltry sums. In the process huge personal fortunes, or is it now misfortunes, were made.
What are we talking about here? The main issue here is whether Zambians are sufficiently savvy to determine the real value and price their asset (Zamtel). Or is it just the lack of appreciation of what the dollar value is? Recent privatization history has shown that there has been a total lack of this knowledge or expertise in Zambia. A perfect example is the current minimum market capitalization of US$500 million that bidders for Zamtel are being asked to meet for a whooping 75% stake in Zamtel. Compare that to the US$3 billion that Vodafone paid for it's 15% stake in Vodacom. We hope Zamtel will not be under sold for a paltry US$500 million but for more. Let us not try to convert the dollar amount into its Zambian Kwacha equivalent because the number of digits obtained are tantalizing.
Let us be realistic about Zamtel's profitability. Zamtel could have been a profitable business, the only problem has been the lack of shrewed management to take advantage of its key position in Zambia. What the company needed someone capable of transforming it's business through the introduction exceptionally attractive programmes to attract more customers. In fact, there is a great opportunity in Zambia for the expansion of fixed-line customer base that currently stands at 95,000 lines. Although Zamtel has been unprofitable for many years, it will not come as a surprising to see new owners transform it into a profitable venture after its acquisition. Having said that, we hope that the sell of industries by ZPA under the Chiluba government provide sufficient lessons for ZDA to arrive at an economic value of Zamtel, a giant that has been dormant until now.
