INDECO: Indefinite Destruction of the Economy Corporation

Filed under: Special Comments |

Part 1

By Hjoe Moono

Allow me to share with you my thoughts on the right approach to industrial development. You will be the judge, but I must state right now that I do not believe government is right on re-introducing INDECO.

INDECO buildingI hear INDECO stands for Industrial Development Corporation but I will show you how in effect it means ‘Indefinite Destruction for the Economy Corporation’. Much has been written already on its history and failures, so I will focus on sharing you the alternate view to effective and successful industrial development which we ought to embrace as we move on with the new government in waiting.

A bit of economics: Growth comes from investments. Investment is all about making money, profits—this is the core aim of every business. Profit. Investment can be Government or Private. However, government investment is limited by tax incomes. You can only tax up to 100%–but by then there would have been a revolution in the country!

Taxes are the greatest source of government revenue. Private sector investment, however, if profitable, can have limitless access to capital from the private banks as well as re-investments. Governments ordinarily do not have the luxury of re-investments—there are so many competing needs that need more and more money!

President Sata

President Sata

Recently however, governments have gone into massive borrowing to finance its operations, but payback is limited by the amount of tax it collects from individuals and private corporations. So ultimately, government relies on the private sector!

With that in mind, however, why does the government seem to ‘hate’ indigenous private sector businesses? Why are private businesses always ‘crushed’ and subjected to negative political interference? Why should government want to engage in businesses that can well be done by the private sector? Why should the head of state be the head of a corporation that competes with the private sector?

The story of the ambitious industrialists of the USA is a clear lesson for us all to learn from on the great role of private enterprise and ingenuity in shaping growth and development in any country. Three such private US citizens who pursued profit but grew USA as a nation are J.P. Morgan who created a financial empire and founded US steel and funded Thomas Edison in founding the Lighting Bulb as we know it today; Andrew Carnegie, an orphaned Scottish child adopted grew to become the example of the rags, dreams to riches story when he founded Carnegie Steel which built the USA skyscrapers, rail roads and bridges; and J. D. Rockefeller, the ambitious oil magnate who founded Standard Oil (Exxon Oil and Mobil).

These men pursued profit and private growth. Through that, jobs were created and a nation was built. They competed aggressively without government interference, in fact, they were able to personally lend money to the USA government from their private businesses. These are argued to be the men that built America.

They were private individuals pursuing private goals of profit but through that, they built a nation we all admire today, the USA. We all admire America and what it has shown the world with regards development. Today, the Rockefeller Foundation funds some activities in Zambia’s health sector and the Carnegie Foundation sponsors students to USA universities. Such are the outbirths of personal ambition when left to thrive.

What is the lesson here: Private capital and businesses are the key to national growth, not government businesses.

So why INDECO? Why invest so much in a defective and useless enterprise such as INDECO when by the way you already have ZCCM-IH as the investment arm of the government pursuing similar goals? Why INDECO when ZCCM-IH has already created MAWE, a company designed to do exactly what INDECO is said to be doing? Didn’t the government know? And why have the president, Michael Sata as chairman of such a corporation? Is he there as a partner in Ilunda Chalo? Or as head of state? What will INDECO do well that private sector cannot do if it is not interfered with?

Here, ladies and gentlemen is the beginning of mass plunder. The president and his colleagues have suddenly realised just how nice it is to be a business conglomerate or mogul—it seems to give power to stand up even against presidents, and they want that power!!! Perhaps this is a lesson from the successful business empire of the Great Business Man-Geoffrey Bwalya Mwamba (GBM). Or is there political jujitsu/karate?

How else would you explain the president and his right hand man’s registering a business the moment they went into power? Did GBM’s business give them sleepiness nights that they see it fit to end all his contracts? Does this also explain the shock our president had when he saw Hakainde Hichilema HH’s net worth? For him, money can only be made in government.

He believes you need to be a government employee to make a profit and wealth. Countrymen, this approach to governance is wrong and if left unchecked will destroy our economy. Furthermore, it will turn Mr. Sata and his government into Political Frankensteins without a heart for the people.

I submit here that INDECO is indeed a corporation for Economic destruction due to the following:

1. Non-accountability and the nature of partisan politics in Zambia as heavily championed by the PF will use INDECO as an institution for rewarding ‘Loyal’ members of the PF at the expense of credible businessmen and citizens. Already, we have seen how the Great Business Man’s enterprises are being tempered with on the accusation that he is not a loyal member of the PF. Should business now be tied to being a member of the PF?

2. INDECO will ‘crowd-out’ the private sector which is the true engine of growth as stated with the case of the American industrialists. With RDA at state house under a party cadre who is unchecked in his operations, INDECO will be used as a funnel to ‘regularise’ corruption and plunder. Money will not flow to the public, it will exchange hands within the PF power circles at the expense of genuine Great Business Men and Women whose aims and ambitions are noble and genuine.

3. Why go to pains of creating INDECO when ZCCM-IH is already there and has industrial projects like Ndola Lime (100% government owned) and Maamba Collieries? Is the problem that the head of state cannot get his way to chair ZCCM-IH? What will be the role of ZCCM-IH and its now new business development company, MAWE? Or is the government trying to compete with its own now? This does not make sense at all

Ladies and gentlemen, the only way to grow and get rich or die trying is through business, whether it is a ketemba or a shop, or a consulting firm or a blue bus running between Mtendere and Kalinga linga, it is the only way we can all add value and bring prosperity to Zambia.

All the government needs to do is make possible and allow an environment for which private businesses and ideas can be nurtured and let people dream and thrive without restraint. Government interference, competition with private individuals and the stupid belief that only government can make you wealthy will not help our country grow.

This breeds plunder and brings extreme suffering to our people. Men like Andrew Carnegie in the USA were allowed to dream, they worked hard, created employment and grew so wealthy that they had to set up their own banks to keep their money!!!! Such are the dreams that our leaders must nurture.

I will repeat here, that while we didn’t know about GBM and his business empire, and now that we know, should be enough motivation for us all to reject calls of government interference in growth and development of private individuals and businesses. Sometimes, perhaps most times in Zambia we need to get out of our own way and pave way for development!

Please PF, get out of the way of business.

In part 2, I will share you the success story of ZAMBEEF and show further just how useless and worthless INDECO is in our time.


4 Responses to INDECO: Indefinite Destruction of the Economy Corporation

  1. INDECO is indeed useless in our time!Politicaly may be we need to extend a party’s mandate in power for 30 yrs for it to make abit of sense.Let’s continue making roads guys .Not this INDECO project which is not sustainable in our time!

    January 7, 2014 at 1:26 am

  2. Let INDECO run Zambia Railways, Tazara and Probably Introduce the New Airline and not to trend on the businesses were the private sector has taken a lead, because in the long run it will be disastrus.

    Ricky Chongo
    January 8, 2014 at 6:42 am

  3. The PF is not serious about INDECO in the real sense. It is just a 2016 campaign gimmick (Donchi kubeba part II) which will be discarded as soon as they are given a second term in 2016. Even Fred Mmembe himself knows very well that INDECO is useless for any liberalised economy like Zambia that is why he writes those extremely long editorials with little misleading substance in support so that you get tired of reading and just leave the editorial alone. For example, what will INDECO do that Zesco can’t do now on its own? INDECO was dependant on a system of cross-subsidisation of industry by industry when Copper prices were high and Zambia owned those mines. Today where will govt get money to subsidise politically inclined and inefficient industries? Even just the salaries of those executives to run INDECO, where are they going to get that money? From another loan Chikwanda will get from Europe after being given a hefty commission? Are they going to renationalise mines? If not then it is a non-starter. Let them conduct a serious and independent feasibility study on the re-establishment of INDECO and then we can talk. They are trying another donchi kubeba on the masses with the massive unemployment numbers existing in the country. They want people to give them a second term with the hope that INDECO will come and rescue their situation. But we are ahead of them. Let them try something else. But for now up to after 2016, they will establish a head office for INDECO with a skeleton staff of very well paid chaps to deceive Zambians that better things are coming.

    January 9, 2014 at 9:21 am

  4. This government is made up of old people who are backward in reasoning. You cant expect progress in such leadership. Their aim is to feed their belly and not concerned with the welfare of the people. The resurrection of INDECO will be a terible catastrophe. The demagogues are the ones going to benefit from this resuscitation. Many who supports the reintroduction of INDECO are in old fashion…

    February 15, 2014 at 12:37 pm

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.