From: barnhart@ddsw1.MCS.COM (Mr. Aaron Barnhart)
Subject: IPS:ZAMBIA: PUBLIC WORRIED ABOUT PRIVITISATION EXERCISE
Date: Fri, 18 Dec 1992 23:49:04 GMT
Organization: Evanston, Illinois, U.S.A.

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: PUBLIC WORRIED ABOUT PRIVITISATION EXERCISE


by jowie mwiinga

lusaka, dec 9 (ips/jowie mwiinga) -- as zambia's privitisation
gets underway with government accepting bids for the sale of the
first 17 companies, fears are emerging over official corruption
and manipulation of the auction.

most initial bids on the companies for sale came not, as was
expected, from international conglomerates, but from
individuals, staff and management of the companies on sale.

however, disquiet met the openning of the bids when it was
discovered that several public officials, including some
ministers and members of parliament flouted the rules to
also bid.

the privitisation act demands that public officers
interested in buying into the parastatal sector make their
intentions public to reduce the possibility of undue
manipulation.

however, one cabinet minister and two deputy ministers
went ahead to bid without the necessary notification,
zambia privitisation agency (zpa) spokesperson ann marie
told ips.

the ministry of commerce and industry responded promptly and
nullified the applications. it also introduced a 100,000 kwacha
(about 300 us dollar ) fine and a five year imprisonment
penalty for public officials who flout the regulations.

''this government stands for transparency and
accountability. it is for this reason that the act demanding
the public declaration of political leaders and officers
interested in buying shares was included, so these ministers
are offside'', deputy commerce minister paul tembo said.

this development is likely to heighten public suspicion
about the manner the privitisation exercise is being
conducted.

already, concern has been raised about the haste with which
the government is privitising, and the lack of public
information on the exercise.

last week, the national conservative party (ncp) filed
a notice of motion in the lusaka high court to halt the
programme until the government had consulted opposition
parties. (more/ips)


zambia: public (2)

''if the government goes ahead selling the public companies
without proper consultation with the people...only the rich,
including some in the ruling party, will benefit at the
expense of the poor'', ncp treasurer yorum mushitu said.

mushitu's sentiments are shared by many observers who have
expressed particular concern over the fact that, rather than
floating the companies, the government is only accepting bids
for outright purchases.

''a lot of people would like to buy shares in these
companies, but they will lose out under the present system
because they do not have the muscle to buy entire companies'',
an economist at the university of zambia, observed.

however, the privitisation agency maintains that such fears
are unjustified.

''only the smaller companies are being sold outright'' marie
explained, ''because the logistics of floating them would not
make sense. we would spend more money floating them than
they are worth''.

the bigger companies, she said, would be floated to the
public.

with the establishment of the stock exchange still on the
drawing board, however, their is scepticism over how the
companies will be offered to the general public.

the ideal situation, they argue, would have been for
government to establish a stock exchange before the
floating of companies began.

bidding for the first 17 companies began last week with
thirty seven bidders, including a south african, a botswana and
a swiss-french firm, slotting in their bids.

the companies auctioned included afe limited, an
agro-financing company, coolwell dry cleaners, norgroup (a
plastic manuafacturing concern) and the national drum and can
company.

it is expected that more foreign bidders will participate
when the larger parastatals are put on sale.

over 60 percent of zambia's economy is state-owned.
privatisation is a condition for donor support of the
democratically elected government of president frederick
chiluba. (end/ips/jm/oa/92)
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