EARLIER this year, this column featured a piece on the Industrial Development Corporation (IDC), stating that its full operation would bring numerous benefits for the country.
Alas today the IDC is a reality and hats off to the Government for fulfilling its promise of establishing the institution which will certainly promote job creation through industrialisation.
Government has since gone on to transfer the shares of 29 out of 33 State Owned Enterprises (SOE’S) from the Ministry of Finance to the IDC.
SOE’S to be superintended and owned by the IDC include; Afrox Zambia PLC, ESCO Limited, Indeni Petroleum Refinery, Indo Zambia Bank Limited, Kagem Mining Limited, Kariba Minerals Limited, Lusaka South Multi Facility Economic Zone Limited, Lusaka Trust Hospital and Medical Stores Limited.
Others are; Mpulungu Harbour Limited, Mukuba Hotel Limited, Mulungushi Village Limited, Mupepetwe Development Company, Nanga Farms PLC, Nitrogen Chemicals of Zambia Limited, Zambia Daily Mail, ZESCO Limited, ZAMTEL Limited, ZAFFICO Limited.
Zambia International Trade Fair Limited, Zambia Printing Company Limited, Zambia Educational Publishing House, Zambia China Mulungushi Joint Venture, Zamcapital Enterprises Limited, Zambia Railways Limited, Times Printpack Zambia, ZSIC Group Limited, ZANACO PLC and ZCCM-IH, are also owned by the IDC.
SOE’S whose transfers to the IDC are yet to be completed include; MOFED London, MOFED Tanzania, Mulungushi International Conference Centre Limited and NIEC Business School Trust.
This week, I will delve into the benefits of the newly created IDC and the mark it should have on the people of Zambia.
The current form of the IDC has been likened defunct Industrial Development Corporation (INDECO) of the Kenneth Kaunda era which housed all parastatals under one firm.
INDECO was established in 1968 and during its tenure oversaw the operations of companies such as Kawambwa Tea Company (KTC) estate in Luapula, Refined Oil Products (ROP) in Ndola, Zambia Mulungushi Textiles (ZMT) in Kabwe, Nitrogen Chemicals of Zambia (NCZ) in Kafue and Mununshi Banana Scheme in Mwense.
Others were Livingstone Motor Assembly in Southern Province, Mwinilunga Pineapple Canning Factory in North-Western Province, Luangwa Bicycles in Chipata, Dunlop Limited in Ndola and the United Bus Services (UBZ).
The above mentioned companies apart from NCZ are no more and the multitudes of people who worked for them are on the streets.
The downfall of these companies stemmed from the fact that loss-making companies got funding from profit-making firms to help sustain those that were struggling.
If ROP was unable to meet the remuneration for its employees in one month due to losses, money would be sourced from the UBZ coffers to help ROP meet its wage obligations.
This was unsustainable as Government unable to maintain a fair return on the investments that it had invested to run these companies simultaneously.
But President Edgar Lungu IDC has said the current IDC is a tool to enhance domestic capital formation, wealth creation and preservation by focusing on exploiting the country’s advantages in natural resources.
It is aimed at actively developing industries and enterprises to create jobs for the people.
The IDC’S oversight responsibilities include all aspects of governance, commercial, financing, operational and all matters incidental to the interests of the State as shareholder.
President Lungu, who is also chairperson for the IDC, has directed line Ministries would now focus on policy making, giving the IDC direct mandate and authorisation to oversee performance and accountability of the SOE’S on behalf of Government.
The SOE’S under IDC would with effect from next year not receive funding from the National Budget to reduce pressure on the Treasury and allow more funds to be channeled towards poverty alleviation programmes.
The IDC would work to maximise the value of Government shareholding and ensure that SOE’S contribute to the Sovereign Wealth Fund (SWF) which will focus on stimulating investment in strategic non-mining industries to increase exports.
From the President’s position, it is clear that the IDC will among other things support value addition to Zambia’s agriculture produce such as tea, bananas and cotton.
It will also improve the country’s feeble export industry which where Zambia failed to sell a single product to the United States (US) market under the African Growth Opportunity Act (AGOA).
The operationalisation of this entity requires careful planning form programme implementation to make it viable and prevent it from taking the path of INDECO.
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