Maravi

Govt wants more from parastatals

Govt wants more from parastatals
By Joan Chirwa
Thursday December 13, 2007 [03:01]

FINANCE minister Nga’ndu Magande yesterday threatened to withdraw shares from parastatals that have not been paying dividends to the government. And Indo Zambia Bank (IZB) has this year made a total dividend payment of K2 billion to the government as a shareholder. Magande said a huge number of parastatal organizations in the country had not been paying their dividends to the government as a shareholder.

“We have not seen fruitions from many of these parastatals in the country and if government cannot get a return as a shareholder, then it is better to withdraw its investment,” said Magande after Indo Zambia Bank paid a final dividend of K800 million to the government as a shareholder.

“Only a few parastatals have been paying dividends and I must say that the Minister of Finance who holds shares on behalf of the people of Zambia will expect returns from these parastatals, but very few are paying dividends.”

Zambia State Insurance Corporation (ZSIC), which is one of the parastatals in the country, says it is not against the idea of paying dividends to the government but it has delayed to do so because of the nature of the insurance business.

“We are in a probability business and everything we do depends on the occurrences unlike other sectors,” said Irene Muyenga, ZSIC’s managing director. “For the period ended March 2007, we have not paid any dividends to the government because we had to settle huge claims for companies such a Konkola Copper Mines (KCM) and BGRIMM Explosives. However, the payment of dividends is on our business plan and we are going to do that.”

Magande said government holds shares in a number of parastatals adding: “This is a big investment worth trillions of kwacha.”

Among the parastatals that government holds shares in include Zesco Limited, National Pension Scheme Authority (NAPSA), Zamtel, Zambia Postal Services Corporation (ZAMPOST), Tazama Pipeline and Zambia National Building Society (ZNBS).
Zesco Limited, Zambia’s power utility company, is yet to give its position on the matter.

According to the Ministry of Finance, some of the institutions that have been consistent in paying dividends include Nanga Farms and Zambia National Commercial Bank.

And during the presentation of the K800 million dividend cheque, Indo Zambia Bank board chairperson Orlene Moyo announced that the bank would soon be commissioning a branch in Chipata and another in Lusaka’s industrial area.

Indo Zambia Bank, which is one of the main parastatals in the country, made an interim dividend of K1.2 billion in March this year. The payment of the K800 million dividend by the bank yesterday translated into a total payment of K2 billion.

“Two more branches are going to be added to the existing nine branches that the bank currently has,” said Moyo.

Labels: DIVIDENDS, MAGANDE, PARASTATALS, ZSIC

posted by MrK @ 4:48 AM