Zambia to re-think privatisation

Zambia has sold 257 of 280 state firms

Zambia's President Levy Mwanawasa has told a delegation from the International Monetary Fund he wants to re-think the country's privatisation programme.

Mr Mwanawasa said privatisation of crucial state enterprises had led to poverty, asset stripping and job losses.

There has been no significant benefit to the country [from privatisation]

Levy Mwanawasa

Privatisation is important for Zambia because the IMF and other western banks will cancel $3bn of the country's $6.5bn debt, provided the agreed privatisation programme is seen through.

Zambia's government must also show this year that it is managing the economy well.

The Zambian president said that although he supported privatisation in principle, mismanagement by his predecessor Frederick Chiluba had caused the southern African country great misery.

'Essential to revisit the issue'

"There has been no significant benefit to the country," Mr Mwanawasa told the IMF's assistant director for Africa Robert Sharer.

"Privatisation has contributed to high levels of poverty, loss of employment and asset stripping.

"This administration felt that it is necessary and essential to revisit the method by which government exits itself from public property."

Zambia has sold 257 of 280 state firms in the past 10 years.

One of the conditions for debt relief is the privatisation of the state's Zambia National Commercial Bank and the concessioning of power utility Zesco and telephone firm Zamtel.

"This administration has made excellent changes although there are many problems which lie ahead and the IMF is ready to help address these problems," Mr Sharer said before the start of talks with the Zambian president.