Zambia’s Industrial Development Corp. said it plans to sell bonds and stakes in state-owned companies to boost investment and economic growth in Africa’s second-largest copper producer.
The IDC, as the company is known, plans to restore profits at the loss-making government entities and reinvest any dividends, Charles Mate, corporate affairs director, said in an interview in Lusaka today. The creation of the IDC this year doesn’t signal a return to nationalization, said Andrew Chipwende, operations director.
“With the IDC we will probably be undertaking privatization even more vigorously,” through publicly listing more state-owned companies, Chipwende said. “We are actually setting a platform to undertake even further privatization.”
Zambian President Michael Sata, who was voted into office in 2011 on pledges to reduce unemployment and poverty, announced plans for the IDC and a sovereign wealth fund in January. Less than 1 million of the 14 million population in the southern African nation are formally employed, according to government estimates.
“There is a fundamental desire for job creation,” Mate, who was managing director at Stockbrokers Zambia Ltd. before joining the IDC, said. “We have an unemployment crisis.”
One of the companies being housed in the IDC is ZCCM Investments Holdings Plc, which was created to hold minority stakes in mines after the government reversed the nationalization policies of former President Kenneth Kaunda. Others entities include Zambia Railways Ltd., Zambia State Insurance Co., and Zambia Forestry and Forest Industries Corp.
New industries the IDC plans to invest in through partnering with private companies include agriculture, horticulture, manufacturing, renewable energy and tourism, according to Chipwende and Mate. Zambia is seeking to reduce dependence on copper, which accounts for about two-thirds of export earnings.
Most of the profits the IDC makes will go toward Zambia’s sovereign wealth fund, managed by the central bank, and the rest will be reinvested, said Chipwende.