IDC directed to work towards listing SOEs in its portfolio

Zambia’s Head of State, His Excellency Edgar Lungu has directed the Industrial Development Cooperation (IDC) to ensure all state owned companies (SOEs) on its portfolio are listed on the local bourse the Lusaka Securities Exchange – LuSE. This was confirmed in a statement issued by IDC Chief Executive Officer Mr. Mateyo Kaluba when ZCCM-IH presented a cheque for ZMW81million as the mining investment vehicle paid the IDC a dividend following a successful financial year.  Kaluba said it is important that the companies that are already listed on the stock exchange continue to operate efficiently and profitably. ZCCM-IH Chief Executive Officer Dr. Pius Kasolo revealed that his firm has paid a 35% dividend to the IDC.

“The dividends that are being declared are K135million and as we all know the IDC had put up a plan however the given dividend policy had to increase from 20% to 35%, that is why we are paying 35% of that. His excellency the President has directed IDC to ensure that all companies who have paved the way in terms of listing can demonstrate to other companies that they can perform, while listed on the stock exchange. Listed stocks will be utilized consistently in our mandate and these include dividends from funds listed and it is from these funds that we can invest in projects,” he said.

Zambian SOEs have come under pressure from a performance perspective at a time when the nation has embarked on  a fiscal fitness path. The Ministry of Finance has echoed strong sentiment around weeding out loss making SOEs as potential cost drivers for the government. This has exerted pressure on SOEs to improve on operational efficiency and yield the requisite profitability so as to allow government to enjoy dividends from its investments. Other SOEs that have paid the state a dividend include the Tanzania Zambia railway company, which earlier in the year paid the Zambian government K600,000 in dividends. However the ask to list will require that the SOEs meet 3yrs consecutive profitability and other corporate governance disclosure requirement benchmark criteria.

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