Why the probe into privatization is a costly venture

Filed under: Special Comments |

By Justin Mupundu

The proposed probe into the privatization of State-owned enterprises under the commission of a judge-led inquiry is costly venture not worth undertaking as it poses serious moral, political, economic and social implications.

The judge –led inquiry if constituted will gobble millions of dollars thus robbing the country’s much-needed meager resources to help strung off her woes.

But how would the ordinary Zambians benefits from the pep into how national assets such as State-enterprises were disposed off on their behalf?
Whilst Zambians have the right to know what transpired for them to appreciate the privatization exercise, it’s not necessary as it will not add value their well-being.

However, my great trepidation is that the proposed inquiry will be a repeat of the money –draining Task Force on Corruption and Plunder of National Resources constituted by the late Levy Mwanawasa in 2002: The Mark Chona –led Task Force gobbled US$11.6 million in legal fees and undisclosed colossal sum of money in operation costs thus robbing the country the much-need resources for provision of social services.

The Task Force, which was allegedly branded as a form of persecution of Mwanawasa’s foes, has up to date not declared the assets recovered from the alleged plunders.

More so, some of the cases of those alleged found wanting are still active in the Courts of law.
What lesson can we draw from the subject in question? I say so because Mwanawasa regretted having constituted the Task Force and threaten to disband it.

In my view, the inquiry should focus on reviewing the mistakes of privatization as it disadvantaged Zambians from accessing their national wealth, and on how Zambians could benefit from the country’s mineral wealth.

In short, the current Government’s 20 percent shareholding through ZCCM-IH denies the Zambian people’s right to benefit from the mineral wealth, and should be increased to 40 percent.

This will give the Government the leverage to generate sufficient non-tax revenues, a ‘Golden right ‘in decision-making in the mining firms, and minimize the perennial Government-Mines tax disputes.

For example, the ZCCM-HI, which declared a gross profit of over K900 million, would have raked K1.8 trillion non-tax revenue.

More so, the raging blame-game between Government and the Mines whenever a new tax regime is announced is a great concern for every right –thinking Zambian: The mining firms often respond by announcing the plans to lay off some workers as a result of the new tax regimes, and are often accused of arm-twisting and blackmailing Government.

The said tussle reveals that there is no meaningful engagement or dialogue between Government (as a minority shareholder,) and the mining firms (that are holding the majority 80 percent shares).

Government has lamentably failed to address the root of the problem because of the notion that they would generate sufficient tax revenues from the mineral royalties and other taxes.

Its’ worth noting that no country in the world could boast of having generated sufficient tax revenues to finance social and economic development programmes.

But every developed country could boast of having generated sufficient non-tax revenues to finance their robust development programme.
What do you think?

The author is a media consultant and political analyst


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