Zambia’s gov’t to formalise working group tasked to save Zamtel
Amid confusion surrounding the future of Zambia’s state-run Zamtel, the country’s President Hakainde Hichilema has appointed a working group to determine the future of the financially beleaguered company.
The working group will investigate the viability of the company and suggest appropriate action to save it.
A letter leaked to the media, penned by Deputy Secretary to the Cabinet Siazongo Siakalenge and addressed to the working group, states that the working group will soon be inaugurated by Science and Technology Minister Felix Mutati.
An excerpt from the letter reads: “Please note that your participation in this technical working group is cardinal as it will help in repacking some of the issues as well as coming up with reconnect and appropriate solutions for the way forward.”
Zamtel is Zambia’s smallest mobile phone operator after South Africa’s MTN Zambia and India’s Airtel Zambia. The company has over three million subscribers.
In July this year, Mutati said Zamtel needs a recapitalisation to the tune of US$265-million in order to survive, but that the government did not have the money.
The Minister added that Zamtel has a working capital deficit of approximately ZMK1-billion with the balance sheet unable to support maintenance of current infrastructure, expansion and modernisation.
He said the company urgently need to invest in its co-networks, infrastructure and other business support services.
There has been speculation in the market that the government wants to sell Zamtel to a foreign company after failing to recapitalise it.
However, authorities have refuted this and insist the intention is to recapitalise it to ensure it is able to continue to compete in the local telecommunications market.
Zambia’s former Ambassador to Ethiopia Emmanuel Mwamba has warned that Zamtel and other assets can’t be sold by the government without the approval of parliament.
He said, “For those plotting and planning to sale state-owned enterprises and assets including Zamtel, the constitution (Law) now provides that parliament approval, signified by two-thirds majority vote should be sought.”