What are the current areas of focus for the IDC?
Our top priority is the transformation of SOEs into viable, profitable, dividend-declaring entities. We have certain enterprises that over the years have been in need of recapitalization, for example. Our second focus is to industrialize by partnering with the private sector in order to open the country up to new industries. Our third area of focus is forging strategic partnerships. We are not in the business of establishing SOEs, but rather collaborating with private sector parties that will take up majority equity.
What has been your strategy so far to make SOEs viable, profitable entities?
The IDC took over the shareholdings for all the SOEs in 2015. Following that, we spent most of 2016 getting to grips with our portfolio, the state of these companies, and what needed to be done with each of them. Since we are in practically every sector—financial institutions, mining, agriculture, and so forth—this portfolio is diversified and it is impossible to have a one-size-fits-all approach. What is more, each company is at a different stage in terms of experience, situation, and growth. Some companies need the kind of recapitalization that brings in new rolling stock. Elsewhere, other SOEs may need balance sheet restructuring, or may have legacy issues to deal with, or cost structures to re-address. Some companies need the IDC's help in the form of a guarantee to the bank to access funds for restructuring or for new equipment. During 2016 we also worked on establishing and positioning the IDC as a holding company, a process that included developing group financials and putting the necessary expertise in place. 2017 is the year in which we expect to reap the fruits of what was sowed in the previous 12 or so months, with many of our interventions beginning to take hold.
What will be the pillars of your strategy to create the target amount of 1 million jobs in five years?
Our strategy is aligned with the national government plan: the Industrialization and Job Creation Strategy, targeting jobs in agriculture, manufacturing, and tourism, along with infrastructure development. This is exactly where IDC's priorities lie; therefore, we are confident that we can spearhead this mission, with each one of our partnerships resulting in employment opportunities for Zambians. In 1Q2017, we had a groundbreaking ceremony for a new tractor and agricultural equipment assembly plant, partnering with a Polish manufacturer that was signed on to supply technology and expertise. Jobs will result from this, not just directly at that factory, but also throughout the resulting value chain. This is how the IDC understands the president's directive, and is strengthened in its resolve to do all it can to activate such value chains.
How do you work strategically to produce revenue streams to feed into the sovereign wealth fund?
In effect, the dividends declared by the IDC will feed into the sovereign wealth fund; however, there is a fundamental precondition to this. First and foremost, we need a balance sheet and a group of companies that can deliver that dividend. For example, we hold equity in practically every mining company in Zambia through ZCCM-Investments Holding Plc (ZCCM-IH), and therefore we may be able to deliver a dividend from this group in the near future. However, looking at the bigger picture, in order to get to the point of contributing to the sovereign wealth fund, we have to transform all our enterprises into profitable businesses. Therefore, making these contributions is a longer-term goal for IDC. In this regard, we measure our success primarily by the number of SOEs we can put on the Lusaka Stock Exchange. Listing is the ultimate transformation. If we reach the point where we have the confidence in a company to list it on the stock exchange, and we are certain it will meet the transparency, governance, and management standards demanded of listed companies, then we know we have transformed it. From our point of view, Zambians can then truly say they own these companies.