The Privatisation Programme pursued since 1992 remains a conflicting process and spawns divisive intense debate.
It was a government flagship program but supervised by the International Monetary Fund(IMF).
Government was determined that the programme succeeded as debt cancellation, international Aid and, restructure and reform of the economy, was tied to the success of the programme.
The IMF hailed it as a model and successful programme in Africa, while many Zambians have realised and regarded it as done in a hasty and deeply flawed manner.
It has since been recognised that it was also a programme which allowed the corrupt acquisition or looting or cheaply selling of prized state assets.
But what is clear is that after the sale or liquidation or disposal of over 270 state owned enterprises, Zambia was left de-industrialised with an almost dead manufacturing sector, unpaid workers in many cases, and a shrunk formal employment sector.
Therefore we have to face the facts, if we do not look into this matter, one day our children will!
Back to the issue.
The Evaluator/Consultant or ZPA set the price and selected the preferred buyer.
To divorce and avoid political influence and political corruption from the process, the price and selection of preferred buyer were left to the Zambia Privatisation Agency or its hired consultants.
For each sale, ZPA management was assisted by an independent negotiating team whose appointment was approved by the members of the ZPA board.
This always comprised an independent chairman, a lawyer, at least two technical consultants from ZPA staff, and specialist consultants/advisers, as required.
The negotiating team liaised and bargained with each selected bidder and eventually hammered out a deal with the selected buyer.
Overall, the team was responsible for securing the best possible deal and for ensuring that agreement was reached on all issues of concern to the Government of Zambia.
These included making sure that the new owners honoured existing conditions of work and pledged to fulfil agreed investments in the business.
Was the use of independent negotiating teams ensured in each and every sale?
The use of consultants or independent negotiating teams was considered as a good way to avoid political interference in the sales and, by and large, negotiating teams or consultants were appointed in accordance with the Privatisation Act.
But it was noted in many evaluation processes as far back as 1998 that the independent consultants or independent negotiating team also acted dishonestly in some cases and also perpetrated private sector driven illegalities.
But both government and the IMF were focused on branding the programme as successful and making it a model, and despite the deep concerns, these matter were shelved or did not attract much attention or scrutiny.
The Exceptional Case of ZCCM
The ZCCM privatisation – by far the most important of Zambia’s parastatals – was one notable exception.
Negotiations over the sale were led initially by the international Merchant Bank, N.M. Rothschild until, at the
end of March 1997, Mr. Francis Kaunda was appointed by the President, rather than by the ZPA board, to head the ZCCM Privatisation Negotiating Team.
This decision was drawn up to ensure the process remained free from undue political influence.
What Happened After Consultant/Evaluation/Negotiating Team Finished Their Process?
Once each individual agreement had been finalised for the sale of the entity by the negotiating team or consultant, the process came back to the Members of the ZPA Board with the proposed price and selected bidder for approval.
The ZPA Board and the Attorney General would review the draft agreement reached.
The Privatisation Act specified that the Minister of Finance would sign the final Sales Agreement to transfer
shares to the selected bidder.
To respond to the current debate that the consultant/Evaluator/ or Negotiating team had no hand in determining the price or in picking successful bidder is not informed by law or by facts as they happened!
The Privatisation Debate is multifaceted. I will return with any other angle if need be.