From: barnhart@gagme.chi.il.us (Mr Aaron Barnhart)
Subject: IPS: ZAMBIA: PREPARATIONS UNDERWAY TO SET UP STOCK EXCHANGE
Originator: barnhart@gagme
Organization: Evanston, Illinois
Date: Tue, 6 Oct 1992 23:24:14 GMT

Copyright Inter Press Service 1992, all rights reserved.  Permission to re-
print within 7 days of original date only with permission from 'newsdesk'.

Title: ZAMBIA: PREPARATIONS UNDERWAY TO SET UP STOCK EXCHANGE


an inter press service feature

by augustine phiri

harare, sep 29 (ips) -- zambian legal and financial experts have
been coming to zimbabwe to consult with local officials on
setting up of a stock exchange in lusaka, the zambian capital.

''they have been delegations from the barclays bank, meridian
bank and the zambian government'', a spokesperson for the
zimbabwe stock exchange (zse) told ips tuesday.

''initially they were interested in seeing how the zse
operates and seek advice on the formulation of the stock
exchange regulations'', the spokesperson adds.

the zse fore-runner, the rhodesia stock exchange, was formed
in 1924 and only assumed its present name at zimbabwe's
independence in 1980. the zse now has 61 listed companies.

by contrast, neighbouring zambia has never had a stock
exchange. prior to the break up of the federation of rhodesia
(now zimbabwe ), northern rhodesia (zambia) and nyasaland
(malawi) in 1964, the three countries relied on the stock
exchange in the rhodesian capital, salisbury (now harare).

although business is less brisk due to the liquidity crunch
in zimbabwe at present, the zse has assisted to set up
stock exchanges in botswana, ghana and swaziland.

''this system is working well in botswana where in the last
18 months, the country has seen a lot of business going on there
through joint ventures'', says zse consultant bill williams.

''we are excited at the prospect of zambia opening its own.
the stock exchange is a crucial mechanism of raising funding for
companies. it is a channel for real investment'', williams told
ips.

zambia, which had pursued a centralised economy under former
president kenneth kaunda, has now embarked on a privatisation
programme under president frederick chiluba.

some 200 state-owned firms are to be auctioned in phases with
the first 20 targetted for privatisation within the next five
years.

there is however widespread apprehension among zambians, some
of whom believe privatisation will further marginalise
indigenous people from the mainstream economy. (moreips)


zambia: preparations (2)

williams seems to confirm these fears: ''if you have no
money, you have nothing and there is no way one can go to the
stock exchange floor'', he told ips.

zambia, like zimbabwe, introduced the world bank and the
international monetary fund (imf)-prescribed economic structural
adjustment programme in 1990.

among other things, the programme envisages the selling off
of parastatal firms to private investors through the stock
exchange mechanism.

the one-year-old movement for multi-party democracy (mmd)
government, which inherited a foreign debt of about seven
billion dollars from the kaunda administration, has drawn up an
investment code allowing investors to remit up to half of their
profits.

this new concept of economic liberalisation is a departure
from socialist lines pursued by kaunda. his government had
nationalised many firms soon after independence from britain in
1964.

although meant to beef up state coffers and lead to an
improvement in the living standards of the people,
nationalisation resulted in most firms becoming habitual loss-
makers.

now, president chiluba says nationalisation is out because
''it must not be the responsibility of a government to sell
needles''.

however, cash-strapped zambians are worried that foreign
investors with vast financial resources will outbid them on the
stock exchange floor for shares.

but williams says ''to ensure the local people are not
exploited, foreign investors must only be allowed to buy 50
percent of the shares in a company and the other 50 percent sold
to local investors''. (end/ips/ap/tvh/apc/92)

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