By MAIMBOLWA MULIKELELA –
THE Industrial Development Corporation (IDC) is to mobilise a line of credit of US$100 million from Development Finance Institutions (DFIs) to recapitalise and reposition State Owned Enterprises (SOEs).
IDC chief executive officer Andrew Chipwende said his institution was expected to raise about US$100 million from the DFI’s to help recapitalise and reposition the 34 SOE’s with the view of listing them on the stock market.
“IDC Zambia has 34 SOEs that from time-time will require working capital support. IDC would like to open a line of credit of about US$100 million which will be drawn on as and when the need arises,” Mr Chipwende said.
Some of the 34 SOEs include Times Printpak Zambia, Zambia Daily Mail, Zambia Education Publishing House, Zambia Printing Company (ZPC) ,ZAMTEL, Zesco, Mulungushi Village Complex, Nitrogen Chemicals of Zambia (NCZ) and Medical Stores, among others.
During his address to Parliament last year, President Edgar Lungu indicated that all SOE’s must ultimately list on the Lusaka Stock Exchange (LuSE) within five to 10 years so as to create opportunities for citizens to own shares in these companies.
Government has transferred its shares in all SOEs under the Companies Act as well as the Banking and Financial Services Act, to IDC.
Mr Chipwende said Government’s shareholding in SOEs represents an important resource which if properly utilised, can bring much value to the country.
In line with its industrialisation agenda, Mr Chipwende said one underlying reason why Government established the IDC was to maximise the revenue potential of its numerous SOEs.
Mr Chipwende indicated that the State was not able to maximise the revenue potential of these enterprises because the majority of them continued to survive on Government subventions.
“This situation impacted negatively on the SOEs in terms of investment, growth, governance and accountability,” he said.
Mr Chipwende said with the establishment of IDC, it was expected that a consolidated ownership structure would ensure that all SOEs align their strategic objectives with Government’s policy of industrialisation and job creation.
Mr Chipwende said with a solid consolidated balance sheet, the IDC would be in a position to raise resources to support new Greenfield industrialisation ventures and play a catalytic role in driving growth oriented Zambian owned industries.
It was expected to develop defined revenue streams from the IDC to fund the sovereign wealth fund for prosperity.