ZCCM: A tale of heartbreak and tears.

Author:Posthumus, Bram

The sale of Zambia's economic bedrock, the ZCCM parastatal has been convoluted, agonising, confused and according to some, confounded. Whatever happens in the future, one thing is certain: there have been many more losers than winners. Brain Posthumus presents an in-depth analysis.

History has caught up with Zambia's copper mining industry. The saga of the privatisation of the country's giant mining parastatal reached its conclusion last October with previous owner Anglo American getting the main assets. The game is over, there are few winners and many losers. This is the tragic tale from the Zambian Copperbelt, caught between the rock of politics and the hard place of the free market.

The towns in Zambia's once-prosperous Copperbelt Province no longer have a rush hour. It is hard to believe that you are in what was the centre of Zambia's economic power-house, a string of towns of anything between 100,000 and 400,000 inhabitants. They should bustle -- but they don't. Shops are locking up, a sure sign of a dangerous economic slow-down and the impression is confirmed by what the locals say. A local reporter puts it very bluntly: "We are dying here."

The town of Luanshya is a pathetic sight. In the centre, a few people hang around the shops that have not yet closed. There is an eerie silence in the air. Even the trees are not spared: people, desperately poor and in need of firewood are cutting them down everywhere.

Not only poverty, but malnutrition and disease stalk the compounds. Tom Kamwendo, of the Kitwe Chamber of Commerce fills in the details: "All the money the people have goes on food, therefore the school fees go unpaid. Children do not go to school. The same for health: people will only go to a hospital in an emergency. In all other cases you have to pay. Health and education are half free -- but it's the other half that will kill you." Dr. Manasseh Phiri, with a life-long history in the Copperbelt medical world agrees: "Nutrition is very poor and people's defences are down. It makes them much more vulnerable to infections, including the threat of HIV/AIDS. There is not a single family here that has not been affected".

Crisis crystal clear

When President Chiluba's government came to power in 1991, it was crystal-clear that something had to be done about Zambia Consolidated Copper Mines (ZCCM), as the state giant was known. There was unwarranted political interference from the previous government and although industry sources would say the mines were still reasonably professionally run, output was in steep and apparently unstoppable decline. The conglomerate was in need of serious capital injections to speed up maintenance and start new exploration.

The Zambian government, dependent on the unpredictable roller coaster that is the world copper market and sweating under a $6bn foreign debt, had no money. The only way to get that money was through privatisation, which tied in brilliantly with the new orthodoxy that had taken root at the World Bank and the IMF. The push was there: the state...

To continue reading