Zamtel's future hangs in the balance … again
The future of Zambia’s state-owned telecommunications company Zamtel once again hangs in the balance after the government initiated another request for a bailout package with the International Monetary Fund (IMF).
During the last round of negotiations regarding a formal request for financial assistance in 2016, the IMF said it was prepared to hand Zambia a US$1.2-billion economic lifeline on condition that the Southern African country sells Zamtel. The government rejected the proposal.
Insiders at the Ministry of Communications and Transport now say the IMF remains adamant about the sale of Zamtel.
The financial organisation is making this a requisite because of the substantial amount of money being used to recapitalise the company in order to make it viable and compete favourably with private operators MTN Zambia and Airtel Zambia.
Other conditions previously set by the IMF include the removal of subsidies on fuel and electricity which the government has already implemented.
According to a statement issued by the IMF on 8 December 2020, it is currently assessing the latest request and, following an invitation from the Zambian government, “Abebe Aemro Selassie, the director of IMF’s African Department and Alex Segura-Ubiergo, a mission chief for Zambia are currently in the country for high-level discussions.”
Isaac Chipampe, the government’s special assistant for press and public relations, issued a statement confirming the IMF team is in the country and has met with President Edgar Lungu and “discussed wide ranging issues regarding Zambia’s relations with Fund going forward.”
Chipampe did not reveal the conditions attached to the new bailout package or how much the government has requested from the IMF this time around.
In 2016 Zambia transferred the management and operation of Zamtel to the Industrial Development Corporation (IDC) after failing to secure US$300-million investment in the company.
Zamtel is the country’s smallest operator with just above three million subscribers.