Social services


The Fund or the people?

28 January 2003 | Guest comment

Forced privatisation leads Zambians to ask who their government answers to

Comment by Mulima Kufekisa Akapelwa Economic Justice Programme Coordinator for the Catholic Centre for Justice, Development and Peace

In the last five years, governance concerns have begun to move up the agenda in development. The multilaterals were among the last to change. What do we mean by governance? In simple terms, governance means openness, participation, accountability, help for the poor and achieving the common good. In Zambia, governance concerns have at -various times in the past led to the withholding of bilateral support and most recently has led to debate over Zambia’s agreement with the IMF. The Fund has required Zambia to privatise the Zambia National Commercial Bank, Zambia Electricity Supply Company and Zambia Telecommunication Company. The three – ZANACO, ZESCO and ZAMTEL respectively – are nearly fully owned by the state.

Finance Minister Emmanuel Kasonde signed the Letter of Intent with the Board of the IMF indicating that ZANACO, ZESCO and ZAMTEL would be privatised without consultation of the people. The executive wing of the government agreed to the privatisation of these companies in the conditions of both the HIPC initiative and the Interim PRSP without consulting parliament. When Kasonde sought support in parliament for a bill to facilitate privatisation, the bill was rejected. Undemocratic and non-transparent negotiations between the government and the IFIs have continued despite the participatory principles enshrined in the PRGF and PRSP. The executive arm of government has, over the decades, become accustomed to being answerable to the multilaterals and not to the legislature – this is what has got us into the current situation.

The IMF representative in Zambia was quick to say in the press that Zambia would lose debt relief worth US $1 billion if it did not privatise. Who will the government heed? It appears that the multilaterals will win the day. In effect, what has been exposed is the continued supremacy of the executive wing over the legislature. Is the IMF correct to point to the “participatory” formulation of the PRSP in explaining the inclusion of privatisation?

The answer must lie in what the common men and women of Zambia say. What these people say may not make economic sense in the eyes of the multilaterals, but development is about giving people a chance to try their way fully – this has not happened through the PRSP on macro-economic policies. Ironically, one of the PRSP goals in governance is to provide more space for people to contribute to policy formulation in the country. Will the government privatise the Zambia National Commercial Bank and meet the conditions for HIPC relief but go against the will of the people, and consequently disengage them? Or will the government decide to make a political decision, lose $1 billion but inspire people to indeed chart out a new path for themselves?

If governance is about openness and accountability surely the IMF should understand Zambians’ concerns. People are saying that the past process of privatisation was not open, accountable and mindful of the poor. The IMF has argued that Zambians themselves chose privatisation through the PRSP process. In the formulation of the PRSP, civil society always asked if there was any room for alternative policies. We were told that the Boards of the IMF and World Bank expected “sound economic policies”. The Boards were the ones who finally approved the programmes. It was expected that the full PRSP would not deviate significantly from the already agreed-upon contents of the interim version.

Zambians are opposed to privatisation of the companies. The reason for this unease is the experience of the mess of privatisation. Take, for instance, the privatisation of one of the big copper mines, KCM. After many concessions were made to Anglo-American, the company pulled out after barely a year. The government is now saddled with the task of finding new buyers yet again. In the meantime, 10,000 people will lose their livelihoods. Another mine that was privatised about four years ago is still unable to pay workers. The Fund champions privatisation in the name of governance, yet none of the ideals of governance – openness, accountability, and participation – have been achieved in the privatisation process.

Catholic Commission for Justice and Peace, Zambia