State enterprise and privatisation in Zambia 1968-1998

Craig, John (1999) State enterprise and privatisation in Zambia 1968-1998. (PhD thesis), The University of Leeds, .


In the 1980s and 1990s, privatisation has been widely adopted across the developing world and has reversed the previous trend towards the expansion of state enterprise. This thesis examines the establishment, operation and privatisation of the state enterprise sector in Zambia between 1968 and 1998. Following the economic reforms announced at Mulungushi (1968) and Matero Hall (1969), state enterprise came to dominate the economy. In 1990 a policy of limited privatisation was introduced which was subsequently extended to cover the entire state enterprise sector. By the end of 1998, this had resulted in the privatisation of the majority of state enterprises. The thesis examines the changing role of state enterprise from a political perspective, with the state analysed as the agent of policy choice and implementation. It examines the reasons for the growth in state enterprise, evaluates its performance and identifies the factors which prompted the adoption of privatisation and influenced its implementation. It argues that the growth of state enterprise was primarily a response to the inadequacies of the existing private sector in meeting the state's developmental objectives. However, the strategy pursued by the state enterprise sector proved to be commercially and financially unsustainable. To these problems were added pressure from creditors and donors for Zambia to adopt policies of market liberalisation. This resulted in the adoption of a strategy of comprehensive privatisation. The thesis examines how the choice of the method of privatisation of individual enterprises reflected the objectives of the government in undertaking the programme and the constraints under which it was implemented. The Zambian Government sought to promote competitive industrial structures, indigenous ownership and the viability of the enterprises involved in the process. It has, however, been constrained in this by a number of factors, including the existing legal rights of minority shareholders, the weak commercial and financial position of many state enterprises and the macro-economic environment in which the programme has been undertaken.

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