An interesting statement from Finance Minister Alexander Chikwanda. He says only 7 parastatals are currently declaring dividends. The rest are loss making :
There are as many as forty State-owned enterprises. Of these, seven parastatal companies declared dividends..This is a small figure, meaning that the other parastatal companies are not performing to the expectation of the taxpayers who put money in these entities. We are, therefore, at liberty to show concern that so many State-owned enterprises are not declaring dividends... it would be logical to wind down the companies that are not doing well because the alternative would be to overburden the already over-extended taxpayers to find money to run the parastatal organisations. Therefore, I think that it is quite a reasonable proposition that companies that are not doing well, and may not do well in the foreseeable future be liquidated (Source : National Assembly)
The seven parastatal companies that declared dividends mentioned by Alexander Chikwanda are (a) Afrox Zambia Limited; (b) Kagem Mining Limited Company; (d) Mofed London; (e) Nanga Farms Private Limited Company; (f) Zambia National Commercial Bank (ZANACO); and, (g) Mulungushi Village Complex Limited.
In 2014 ZCCM-Investmet Holdings and ZAMPOST also declared dividends. Earlier this month, Indo-Zambia also declared dividends. So our view is that the "current" figure is actually around 10 parastatals. Of course that does not change anything. The government is broke. It needs to get rid of the loss making parastatals.
People are always constantly saying Zambian Economist does not provide solutions on how to tackle the deficit and reduce the vast size of government. But we have been giving many solutions which are actually well known. There is simply no political will.
So let us repeat one solution. How about we privatise some of these loss making parastatals? The government clearly has failed to run them and is in fact broke. Chikwanda agrees this is reasonable, so why is GRZ not doing anything about it?
Here is a full comprehensive of all parastatals that are currently NOT declaring dividends :
• African Reinsurance Corporation
• Contact Haulage Limited
• Development Bank of Zambia
• Engineering Services Corporation
• Indeni Petroleum Products Limited
• Indo-Zambia Bank Limited
• Kariba Mineral Limited
• Lusaka Trust Hospital
• Medical Stores Limited
• MOFED (Tanzania) Limited
• Mpulungu Harbour Corporation
• Mukuba Hotel
• Mupepetwe Engineering Company
• National Airports Corporation
• National Housing Authority
• National Savings and Credit Bank
• Nitrogen Chemicals of Zambia Limited
• Tazama Pipeline Limited
• Tanzania Zambia Railways (TAZARA)
• Times of Zambia
• Zambia Forestry and Forests Corporation (ZAFFICO)
• Zambia – China Mulungushi Textiles of Zambia
• Zambia Daily Mail
• Zambia Education and Publishing House
• Zambia Electricity Supply Corporation (ZESCO) Limited
• Zambia National Broadcasting Corporation
• Zambia National Building Society
• Zambia Printing Company
• Zambia Railways Limited
• Zambia State Lotteries Board
• Zambia Telecommunication Corporation (ZAMTEL)
• Zamcapitol Enterprises
• Zambia State Insurance Corporation (ZSIC) Group
All of these companies are loss making. We should move to sell these companies urgently. A proper audit is needed to value the assets and assess how much money can be made to pay down on our debts.
Some parastatals like ZESCO should be broken up with parts sold off. Others should be sold completely to raise money. But even if there is no money to be made, at least by getting rid of them GRZ will now cut down on waste. That will enable it channel resources to much needed areas. Right now we are borrowing from abroad to keep useless loss making companies like #Zambia Daily Mail afloat. It is economic suicide.
So, where should we start the sell off?
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