President Frederick Chiluba's government appears to be on a collision course with the World Bank and the International Monetary Fund (IMF) over the privatisation of public utilities.
During the World Bank consultative group meeting with donors, held in Lusaka last year, the Zambian government made firm commitments to privatise the Zambia Electricity Supply Corporation (ZESCO), Zambia Telecommunication (ZAMTEL), Zambia National Oil Company (ZNOC), Indeni Oil Refinery and Zambia National Commercial Bank. This was one of the conditions the Zambian government had to fulfil before international donors were prepared to activate several balance of payments support pledges. But now the Zambian government has made a u-turn on the matter, saying the public utilities will not be sold to the private sector, but will instead be commercialised to make them more efficient and profitable.
President Chiluba recently told a rally organised by the governing party - Movement for Multiparty Democracy (MMD) - that the parastatals will not be sold because "these industries are strategic. The government needs to play a part in these industries in the interest of our economy and our people."
President Chiluba said the people of Zambia would stand to benefit little from the sale of the utilities, as most of them would be gobbled up by foreign owned companies, with little, if any, interest in the country's economic welfare.
Until now, Finance Minister Dr Katele Kalumba and other government Ministers seemed to be supporting the privatisation idea although they wanted to wait and see the conclusions of a study on the optimum way to dispose of the public utilities.
But Chiluba now appears determined to oppose all moves to privatise public utilities. He said the country had learnt bitter lessons from the privatisation of other parastatals.
"We were blind when we sold some parastatals, and made mistakes." He said parastatals like Chilanga Cement should not have been sold to the Commonwealth Development Corporation (CDC). "How can you have a parastaral buying off another parastatal, and calling it privatisation? Government was asleep when it sold Chilanga Cement and Zambia Sugar to CDC which is a British parastatal. We are wondering why some countries are advocating the dismantling of parastatals here while on the other hand keeping their own parastatals back home."
Support for Chiluba
The Zambian government's stand has won the support of trade unionists, human rights...