Only 2 out of 25 State Owned En­ter­prises – SOE’s de­clared div­i­dends

Zambian Business Times - - FRONT PAGE -

ONLY 8% of State Owned En­ter­prises – SOEs de­clared div­i­dends to gov­ern­ment. This was con­tained in a re­port by Act­ing Au­di­tor Gen­eral Ron Mwambwa to Pres­i­dent Lungu made pub­licly avail­able to the Zam­bian Busi­ness Times – ZBT. The re­port re­vealed that out of the twenty-five (25) SOEs un­der the In­dus­trial Devel­op­ment Cor­po­ra­tion - IDC port­fo­lio, in which IDC holds 60.7% to 100% share­hold­ing,.....

ONLY 8% of State Owned En­ter­prises – SOEs de­clared div­i­dends to gov­ern­ment. This was con­tained in a re­port by Act­ing Au­di­tor Gen­eral Ron Mwambwa to Pres­i­dent Lungu made pub­licly avail­able to the Zam­bian Busi­ness Times – ZBT. The re­port re­vealed that out of the twenty-five (25) SOEs un­der the In­dus­trial Devel­op­ment Cor­po­ra­tion - IDC port­fo­lio, in which IDC holds 60.7% to 100% share­hold­ing, only two (2) namely - Mu­lun­gushi Vil­lage Com­plex Lim­ited - ZMW200,000 and In­deni Petroleum Prod­ucts Lim­ited - ZMW7.4mil­lion de­clared div­i­dends for the year 2016 in amounts to­tal­ing ZMW7.6mil­lion.

The 23 com­pa­nies that have failed to de­liver div­i­dends are more of a drain to state cof­fers which in­clude: Mu­lun­gushi Textiles Lim­ited, En­gi­neer­ing Ser­vices Cor­po­ra­tion - ESCO, Med­i­cal Stores Lim­ited - MSL, Mpu­lungu Har­bor Cor­po­ra­tion Lim­ited, Mu­pepetwe En­gi­neer­ing Com­pany, Mukuba Ho­tel Lim­ited, Lusaka South Multi-Fa­cil­ity Eco­nomic Zone Lim­ited - LSMFZ, Ni­tro­gen Chem­i­cals of Zam­bia Lim­ited -NCZ and NIEC School of Busi­ness Trust.

Oth­ers also mak­ing the shame list are ZCCM In­vest­ments Hold­ings – ZCCM -IH, Zam­bia Daily Mail, Times Print Pak Zam­bia Lim­ited, ZESCO Lim­ited, Zam­bia Forestry & For­est In­dus­tries Com­pany, Zam­bia Ed­u­ca­tional Pub­lish­ing House Lim­ited - ZEPH, Zam­bia In­ter­na­tional Trade Fair - ZITF, Zam­bia Print­ing Com­pany -ZPC, Zam­bia Rail­ways -ZR, Zam­bia State In­surance Cor­po­ra­tion Life Lim­ited, Zam­bia State In­surance Cor­po­ra­tion Gen­eral Lim­ited, Zam­tel Lim­ited, Zam­cap­i­tal En­ter­prises and Mu­lun­gushi In­ter­na­tional Con­fer­ence Cen­tre.

Some of the com­pa­nies that are on the list of SOE’s fail­ing to de­clare div­i­dends but op­er­at­ing in lu­cra­tive in­dus­tries are com­pa­nies such as ZESCO and Zam­tel. For ZESCO is a mo­nop­oly and cur­rently en­joys hav­ing a ver­ti­cally in­te­grated busi­ness across gen­er­a­tion, trans­mis­sion and dis­tri­bu­tion. The en­ergy sec­tor re­mains a very at­trac­tive in­dus­try not just in Zam­bia but across the re­gion and glob­ally.

Take Zam­tel for in­stance, it’s peers and multi­na­tional lo­cal units like MTN and Air­tel are mak­ing huge prof­its while the com­pany con­tin­ues to ask for more in­vest­ments from the gov­ern­ment in­stead of en­gag­ing banks as per nor­mal busi­ness op­er­a­tions.

The two life and non-life units of the State In­surance Com­pa­nies are also other units that are op­er­a­tive in a lu­cra­tive in­surance mar­ket and yet fail to make prof­its let alone de­clare div­i­dends to the trea­sury.

List­ing is a po­ten­tial so­lu­tion to this anom­aly. List­ing some of these en­ti­ties on the Lusaka Se­cu­ri­ties Ex­change so that some level pri­vate in­ter­est comes in that will make these com­pa­nies Chief Ex­ec­u­tive Of­fi­cers - CEOs be­come ac­count­able at An­nual Gen­eral meet­ings. The mar­ket forces on the stock mar­ket and rules re­quired to main­tain a com­pany list­ing as well as trans­parency re­quire­ment will aid in put­ting pub­lic con­trols over and above the IDC and gov­ern­ment con­trols.

The gov­ern­ment should con­sider trim­ming its share­hold­ing to say 51% and sell the 49% to Zam­bians to avoid tak­ing the route of sell­ing share­hold­ing to for­eign in­ter­ests. We have now de­vel­oped a good num­ber of Zam­bians who are ca­pa­ble of tak­ing stake in these com­pa­nies and mak­ing them vi­able. Con­trols must be put in place that Zam­bians are not used as fronts for for­eign in­ter­ests in these trans­ac­tions.

Photo: Zam­tel hav­ing a tough time to de­liver div­i­dends in the lu­cra­tive Telecoms in­dus­try

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