NEWS that Government has signed an acquisition order to take over the moribund Kawambwa Tea Company (KTC) Limited in Luapula Province is exciting.
This is because for a long time now, the capacity of tea processing company has diminished to levels where foreign manufacturers of the commodity have penetrated the local market with their produce.
This should not have been the case because Zambia is renowned for being the Southern African region’s crop basket.
President Edgar Lungu announced on his recent tour of duty in the province that Government had taken over the operations of KTC and would revamp the firm’s operations to create jobs for the people.
In September last year, Luapula Province Permanent Secretary Boniface Chimbwali had indicated that KTC would be managed by the Zambia Forestry and Forest Industries Corporation (ZAFFICO) after the acquisition process was concluded.
At that time, the process was in its infancy as the State had to address several factors that had left the company where it has been since a Zimbabwean investor dumped the firm years ago.
The erstwhile investor, Gombe Holdings of Zimbabwe left more than 400 employees in limbo over the fate of the company in despite assuring continuity of operations after taking over the company from another investor; India’s Binani Group.
Thus the determination by the head of State to revive operations augurs well because the people of Luapula are in much need of industry to provide jobs and improved livelihood.
The region suffered a lot from the era of privatisation as could be attested to the going down of Mansa Batteries which was a testimony of how industrialisation and value addition when intertwined can have massive benefits for the community.
Now with the pronouncement of the acquisition, what is the way forward?
Government has created the Industrial Development Corporation (IDC) which is tasked to manage State Owned Enterprises (SOE’s) and ensure that they are profitable.
KTC should be expeditiously incorporated into IDC so that resources can be sourced to make it viable again.
There is need for fresh capital injection in the firm so that its outlook can improved and ensure that operations meet both the local and foreign demand for the tea produced there from.
During his previous visit to the area, President Lungu did address the workers and assured them that prior to full acquisition, the Government has addressing the plight of KTC workers regarding wages.
With workers now being paid in good time, the aspect of motivation has been addressed thus focus should be shifted to the other factor of production which is capital.
With the progressing developments in the area of power generation, as load shedding has now reduced significantly, developments such as the one at KTC are welcome because this signifies that the country’s aim of diversification away from Copper can be achieved with correct policies.
While our country’s economy is open for the private sector, where possible the Government should also have a share of the industry and market because this will keep resources locally.
Challenges such as currency instability emanate usually from deficiency in the amount of money circulating the economy thus for Government to generate profits and keep the money locally, will be worthwhile.
The IDC is a good approach to ensuring profitability of SOE’s thus the Government should ensure that the operations of the corporation do not go under as was the case with it in its former version as INDECO.
It is my hope that IDC will lead the way in improving the country’s feeble export industry and enable Zambia go far in penetrating global markets solely and through platforms such the African Growth Opportunity Act (AGOA).