Africa’s second largest red metal producer Zambia will seek to roll out a state owned enterprise policy aimed at improving governance and performance of government owned businesses. According to a budget speech presentation by Dr. Situmbeko Musokotwane on 30 September, Zambia will implement an SOE policy that will provide an intervention mechanism to keep government owned businesses accountable.
“Madam Speaker, Government is concerned about the performance of our state-owned enterprises. In this regard, Government is developing a state- owned enterprise policy to strengthen their governance and improve performance. The policy will also provide a framework for conducting periodic assessment of state-owned enterprises to ensure appropriate interventions, Musokotwane said.
“Stronger governance is also required because of some questionable investment decisions that were made by state enterprises. In particular, cash rich state enterprises shall not be allowed to buy businesses that are of no strategic value or being made to buy existing businesses where the vendors believe only a state-owned enterprise can agree to pay an inflated price,” he said.
The Southern African nation continues to have a plethora of government owned businesses operating sub – optimally which has cost the state dividends. Some SOEs have been seen to invest in business that are not respective of excellence costing overall performance of portfolio.
Zambia’s state owned entities are currently managed by the Industrial Development Corporation, a vehicle that manages government interests in businesses across various faculties. This covers wholly owned to all types of stakes held by the government.
With the copper producers economy on a rebound, the authorities have taken keen interest in ensuring that these entities operate as competitive as private owned entities within the mining, telecommunications, manufacturing, transport and logistics faculties.
The Kwacha Arbitrageur
