In 2014 Zambia’s government took a bold step to accelerate the country’s economic diversification, bringing public firms under a new investment arm
The Industrial Development Corporation (IDC) is a tool Zambia’s leadership believes will draw vastly increased levels of investment into the economy, creating wealth and jobs to further stimulate the national economy.
The original idea was quite simple, but innovative, following similar examples of creating non-government investment bodies in economically forward-thinking countries such as Singapore, Malaysia, South Korea and South Africa. State-owned enterprises that were languishing due to lack of investment were placed under the IDC’s wing to partner in the search for new funding, greater vision and, ultimately, increased profitability.
This is no divestment of public concerns for short-term gain, but rather a platform to create conditions for future success. The IDC has been set stringent targets for job creation to demonstrate that it can help transform the Zambian economy.
The IDC’s CEO, Mateyo Kaluba, has a blunt take on the corporation’s mission: “The fact that a company is owned by the state should not be an excuse for poor performance. The people, as shareholders through their government, deserve a return on investment just like any other shareholder in the world. We’ve told companies in the IDC Group that the era of loss-making and lack of accountability has to come to an end.”
There are 34 companies on the IDC’s investment portfolio comprising 12 economic sectors, from agriculture to ICT. Zambia Railways is working with the IDC to attract the billion-dollar investment it needs to modernise its network, while the ZAFFICO forestry corporation is another partner seeking to boost the rural economy.
IDC has already made hugely encouraging strides in the energy sector. Power company ZESCO, an IDC partner, announced in 2017 that Zambia’s national output had been increased by almost 20 per cent thanks to the opening of two new power plants. Next, the ground-breaking Scaling Solar project will add a further 100 megawatts to the national grid, but the IDC is looking further ahead in terms of diversification.
“At the IDC we have done our job in demonstrating that solar energy is viable in this country. Now we are working with various partners to demonstrate that wind energy is also viable,” explains Mr Kaluba.
“Apart from overseeing all state-owned enterprises, I believe IDC is a great avenue through which to enhance domestic capital formation, employment and wealth creation through focusing on exploiting our country’s advantages in natural resources,” says Dr Pius C Kasolo, CEO of ZCCM-IH mining company.