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Do We Deserve to Be Mocked By Agarwal?
Anil Agarwal’s story about how he has dribbled the Zambian people and their government to make a fortune is annoying.
But the anger should not be wholly directed at him. A greater part of it should be directed at ourselves, our leaders and our government. Agarwal knew what he was doing and we should also have known what we were doing. In fact, the Zambian government and the Zambian people were warned about how poor this deal was. On November 9, 2004, we carried an editorial comment titled ‘Zambia’s careless privatisation’. And in that comment, we stated the following:
“Zambians cannot in any way claim to have benefitted from the privatisation programme started by Frederick Chiluba’s administration in the 1990s.
The Zambian people have, in fact, suffered the adverse effects of what is clearly a failed privatisation programme which was heralded – and stupidly so – as the fastest privatisation programme in the world. There were even some careless statements to the effect that there would be no sacred cows in the privatisation programme.
Sadly, we seem to have continued on the same path. The government seems to have learnt no lessons even with over a decade of implementing the disastrous programme.
The most notable results of the fastest privatisation programme in the world had certainly been the huge job losses and the countless collapse of companies, some of whom were stripped of equipment and relocated. This has been the ‘benefit’ to the Zambians.
We are certainly concerned that there appears to be no worrying about the continuing trend to just give away our treasured national resources, especially in the mining sector, for almost nothing. And a classical case is the just signed deal with Sterlite’s Vedanta. Through this deal, government has given away a 51 per cent stake in Konkola Copper Mines for US$25 million, a mining venture that just recorded US$60 million in its half year results this year.
Government has certainly continued to play its father Christmas role and managed yet again to offer a gift to foreign investors.
The deal is certainly equivalent to selling KCM’s 51 per cent for the mine’s own 2004 half year profit.
The sale is almost giving away KCM to Vedanta unless there are other hidden benefits which are yet to be disclosed. Zambians should start to question the government on the continuing practice of giving away national assets even if there is pressure from the International Monetary Fund and the World Bank.
It is indeed difficult to understand why mines minister Kaunda Lembalemba had welcomed and vehemently defended the Vedanta deal as a good one. For the government to consider US$25 million as a worthwhile amount for Sterlite to have a majority stake in our largest assets, may be an indicator that things are very bad in the country. We really cannot accept the argument that there were no alternatives to the Vedanta deal.
We did raise similar sentiments over the sale of Baluba mine to J &W Investments. We still maintain that the two deals have merely been gifts and definitely not sales. And it is time the Zambian people started to question the justification of the father Christmas attitude by the government leaders.
It is not long ago that government sealed a US$7.5 million deal with J&W for Baluba mine. To make it worse, J&W Investment group only paid the Zambian government US$750,000 as a 10 per cent down payment.
We regret that our government has again hastily signed another poor deal which would sadly not benefit the Zambian people and indeed the country as a whole.
When one takes a critical look at the manner the privatisation process is being handled and the clear hurry to bring on board foreign investors to take over our national assets, one could simply conclude that there seems to be a misconception about privatisation. A common argument advanced for privatisation is that this is a means to mobilise private sector investment, including foreign investment, for developmental goals. This argument is not necessarily wrong. Where it is wrong is when it assumes that this is the only possible way to mobilise capital resources.
The privatisation route must always be weighed against the advantages and disadvantages of other possibilities of raising investments. Governments are able to access major relatively low interest loans on foreign capital markets, of course ignoring the International Monetary Fund and World Bank restrictions. While this will increase the public debt, it may well prove to be financially more prudent in the medium and long term. International examples abound of privatisation projects designed to relieve governments of financial burdens that have back-fired.
A common argument for privatisation is that government should best occupy its time and resources with setting strategic objectives, leaving management and ownership to the private sector. This might, in many cases, be the most feasible option, not least in a national and global economy that is dominated by capitalism.
Attempting to regulate the private sector might prove to be more complicated than actually owning and managing an entity – numerous international examples of concessions, and other restructuring projects raise questions about the complexity of regulating private entities, and of ensuring that they do indeed deliver efficiently and that they do effectively carry risk, the ostensible reason for being ‘rewarded’ with profits. All too often, private entities nominally carry risk, until there are losses, then they expect to be bailed out with public subsidies.
It is true that we often lack capacity and resources in the public sector and parastatals, but it might, in the medium term, prove to be more reliable building such capacity and resources. The task of regulating major transnationals might be more daunting than improving your own public service capacity.”
This is what we stated in 2004 when the Levy Mwanawasa government was giving away KCM to Agarwal for a song. And throughout that period, the government defended whatever KCM did. When there were industrial disputes, the government always took the side of Agarwal. Even when KCM polluted the Kafue River, they literally got away with it.
Today, Agarwal is mocking the Zambian people and their government. And these are the same people and government that still want to extend more concessions, favours and subsidies to KCM. As it was in 2004, there are still people today speaking for Agarwal and his company. They have hired literally every known expert in mining, business and economics, law and politics in this country to speak for them, to defend their interests. And the people don’t seem to have such experts to speak for them, to defend their interests. The few who attempt to defend the people and their interests are dismissed as charlatans who know very little, if not nothing.
We hope there will be a national awakening in the light of these experiences and that we will start to do things in the right way and act in the best interest of the people.
Posted by Admin
on May 17, 2014. Filed under LATEST NEWS.
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Observer
May 17, 2014 at 4:55 am
Yes,because you are dull as a country. That’s the Chinese and Indians are shitting on your heads everyday
Observer
May 17, 2014 at 4:56 am
Yes,because you are dull as a country. That’s why the Chinese and the Indians are shitting on your heads everyday
Acumen
May 17, 2014 at 5:49 am
That’s the result of being petty and corrupt as well as greedy.
diamond platinum
May 17, 2014 at 7:10 am
No one can like to be mocked,even the late Mwanawansa did nothing at the time he was a president.Now that as passed let this new government sort out this issue.
zodiac
May 17, 2014 at 7:19 am
HH was part of the people representing government and the people of zambia during those rotten privatization. I challenge HH to apologize to the people of zambia for the sins and poverty they have cursed to the people of zambia.
hereafter
May 17, 2014 at 8:00 am
The I.di.ots involved in privatisation were very selfish and thought only about what they could get out of it and this include foolish HH. Whatever he has is a result of the stupid privatization!
mwamba mutale
May 17, 2014 at 8:01 am
Its not only in the mines. Displacements of zambians by the chines in the markets is also worrying. We thot foreigners shud come as serios investors but they seem to be seriouse infectors
hereafter
May 17, 2014 at 8:02 am
The I.di.ots involved in privatisation were very selfish and thought only about what they could get out of it and this include foolish HH. Whatever he has is a result of the stupid privatisation
chabala kapwepwe
May 17, 2014 at 9:27 am
AS zambians we need to very careful when it comes to enganging the so called investors.we only have to wait for the the position of the government on this matter.The government should release a statement as regard to this issue.
Abdu Madada Kasai
May 17, 2014 at 10:17 am
Yes, Argawal is not mocking Zambia,what he is doing is reminding Zambians that we are running this country under uncontrolled
Chagy
May 17, 2014 at 11:10 am
I think we are all running fast to condemn the privatization process and the Vendata owner acquiring or buying of the mine more so pointing fingers without asking our selves simple questions;the big issue is how did the KCM owner manage to go with $500 million plus $1 billion every year for nine years without being detected? despite the manner in which he acquired KCM
expert
May 17, 2014 at 11:31 am
@ Chagy, we are not condemning the vedanta owner alone, everyone who sat to negotiate the deal, especially those representing us at thet time are to blame. Who knows may be if a good amount was realised from the sale, the proceeds would have been reinvested into ZRA to enhance the revenue collector technologically. As it stands my friend, ZRA does not have the capacity to capture all the transactions these mines are engaging into. It is for this reason that the current government came up with the two SIs that were not effective as they were too manual a way of monitoring transactions in the economy and were later revolked.
expert
May 17, 2014 at 11:23 am
Levy and his friends knew very well what they were doing at that time. They knew what was going into their own pockets. Even Fredrick and HH too made themselves rich throgh such deals. Its a pity that HH is today a hero in the same country whose resources he has plundered with the help of his foreign friends. In the name of being peace loving zambians, greed, vanity, corruption and all other evils will continue to grow in zambian politics. its a shame.
FuManchu
May 17, 2014 at 6:34 pm
Expert, this is where most of us miss the point, to Chagy you say we should hold blame those representing government for failure in the negotiations to which I agree but I am at variance when it comes to apportioning blame to those on the side representing the company for as the article above states, the company hired experts whom they paid to deliver for them and who outsmarted the government representatives! Thus government must rethink on how they remunerate people chosen to such high profile negotiations. Just think, there is no way that Chibamba Kanyama will go and start talking for Zambia in the new high profile job he has taken up with the world financial institution. If that were the case he might as well have stayed with the local broadcaster!
spinx
May 17, 2014 at 12:37 pm
in the first place it is us who sold the mine to them with the assistance from our brothers we trusted like late president mwanawasa and hichilema.h,why complain? every person who we expect to do something is either quiet or benefited from it. Lets just wait for the end of the world for christ to come and sought it out for us coz we have failed and on top of that he will even burn us coz he has given us five senses to use but can’t use it.we behave like we are cursed.every day its the constitution whilst indians are busy stealing at kcm. now they have even started insulting us in our own country,the problem is not with vendatta but with us zambians.
Simba
May 17, 2014 at 12:57 pm
And you see how the people of Chingola are suffering ? KCM was sold by Chiluba for $25 billion million and to them that money can be recovered only with 2 heaps of low grade copper from COP F or CUT II open pits, now can you imagine how many years this dog Argawal has been making from 2004, does he know how many marriages have been broken in Chiwempala because of poor salaries here in Chingola?
Can you take this shit to Mugabe and his diamonds and go free? and Argawal Matole yanyina has the balls to laugh on radio bwamba bwa noko. do you have a clue how hot is underground.
Cool Mo D
May 17, 2014 at 1:41 pm
Is this not the post newspaper editorial comments?lazy tumfweko.Anyway we deserve to be mocked how do you sell a mine at 25m$ even four times less Gareth Bale was sold to Real Madrid.What a country!!
sekouponoke
May 17, 2014 at 4:05 pm
Thanx ba post for this reminder and the editorial.the biggest problem we have in mining is Tax evasion.levy mwanawasa could have sold the mine cheaply and thot the big realisation would be through tax.agawal promised high copper output and thus high tax.but they always underdeclare their output thus paying low tax.selling a mine at $25m was a bad deal but we nid to find a way forward.we nid to charge KCM with tax evasion,flouting of enviromental laws and labour laws.zambia,let us nationalise the mine.if they take us to court,we will collect more revenue before a ruling in their favour.govt can find experts within zambia to run the mine.my submission is nationalise the mine coz tax evasion is good ground for reposesion and remmember they will never pay the right amount of tax
Accumen
May 17, 2014 at 4:06 pm
I remember very well when this KCM was sold at that price, we were very astonished and we were wondering how they can sale such a huge propery to less than the price Chelsea bought Drogba. Awe mwadini insala ilasebanya.
KK
May 17, 2014 at 4:58 pm
REPOSSES THE MINE IMWE BAFIKALA FYA BA SHINWE!
gogo
May 17, 2014 at 8:33 pm
awe mwandini nishiku shakupera last days.
jamakudi
May 17, 2014 at 10:03 pm
Leave HH out of this you fools.
angoni chaiwo
May 18, 2014 at 8:09 am
what i rember is that ftj govt wanted to sell zccm as one entity but his wise minister in the name of dr matthias mphande totally opposed this and he’s dropped by ftj as a cabinet minister. Next we saw the abrupt withdrall of anglo american corporation from running the present kcm. This move sent levy’s govt into panick for it’s not possible for govt to run the mines. Levy’s govt hurriedly advertised to sell the mines to any bidder. During that period no buyers with good offers came forth. And then this crooked mwenye came on the scene and got the mine for a song. Fellow zambians we can still benefit as a nation by collecting right taxes from kcm. Pf said they would re start the windfall taxes but when they formed govt they develpoed cold feet. Pf govt seem not to know how much minerals are being exported and what’s due to us. Just look at the composition of pf cabinet: most of them are there to reap. Moreover, the captain of the ship seem to have gone into a deep slumber.
Jinx
May 18, 2014 at 8:47 pm
Why HH is quite over this issue?