Government to increase Zanaco bank sale price


The government will increase the price for the stake in state-owned Zambia National Commercial Bank (Zanaco) it is selling to Rabobank after criticism of the deal, a government agency said on Wednesday. The government has come under fire from trade union groups and some opposition parties for agreeing to sell the 49 percent stake in Zanaco to Dutch bank Rabobank for $8.3 million.

The Zambia Development Agency (ZDA), which is supervising the sale, said in a statement that Rabobank and the government would appoint independent auditors to re-assess the net asset value of Zanaco, one of the sub-Saharan country’s largest retail banks.

“(The government) and the strategic investor will commission an independent auditor to determine the net asset value of the bank … on which basis the price adjustment will be made,” the ZDA said.

The ZDA said the purchase price for Zanaco was based on the bank’s financial assessments conducted in December 2004. Since then, the bank’s assets had grown and it was making more profit.

“Over time, however, the financial status of the bank has changed, and there is therefore need to assess the change which will result in a price adjustment as provided for in the sale and purchase agreement,” the ZDA said.

The ZDA said the government had agreed with Rabobank to maintain rural branches that serve farmers for a period of 10 years after complaints that farmers would not manage to obtain favourable terms and services from other multi-national commercial banks.

“Contrary to apprehensions and concerns by the public, (Rabobank) has agreed with the government that it will maintain all existing rural branches for a period of 10 years with the exception of possible relocation of branches,” the ZDA said.

The agency said plans to float a further 25.8 percent of Zanaco held by the government on the Lusaka Stock Exchange (LuSE) would be concluded soon, but gave no exact date.

Under the deal, the government would retain 25 percent shares after the LuSE listing, while minority shareholders would retain 0.2 percent shares.

The sale of nearly half of Zanaco has dragged on for nine years and has been surrounded by controversy after the International Monetary Fund (IMF) placed the privatisation of the bank as one of the conditions for Zambia’s access to IMF loans.


  1. Come on Zambia, who authorised the sale of ZANACO at that ridiculous price? I am not an economist but just ordinary logic will tell you that you cant base a sale of a national asset on a financial assessement conducted in 2004.That is 4 years ago!
    if we were under pressure to sell ZANACO ($8.3 million), why in God’s name was the bank not sold to ordinary Zambians. I am sure as poor as we are if we pooled our Kwachas together we can easily raise $8.3 million to buy what is ours

  2. Iam still disgusted by Zambian mentality, the mines were sold for a song, now Zanaco has been sold for for a verse, how can people sure be selling such an enormous entity for $8m.All culprits involved must be brought to book.OECD has formulated laws that should curtail foreign investors who con developing countries and promise mountains in return. One such clause will eventually be applied to these crooks.what is the past history of these same chaps?
    Amro is being investigated by US justice dept and may jeopadise the deal with barclays so better be careful with these characters.

  3. Its already too late to do anything. George Kunda if pressed too much will tell us that the contract signed is above the law? One wonders which laws he refers to-is it corruption laws or Zambian laws, Iam disgusted

  4. I think it’s not too late.. the sale and purchase agreement clearly say that the price can be adjusted. I just hope the appointed evaluators are not bribed or bought. That is where we shall get screwed.

    Maybe the Unions and Opposition should appoint their own evaluators as well and we see what they come up with.

    Kavindele sold Woodgate House for a huge sum in the 80s and property always appreciate in value and Protea recently bought mutaba house for decent sum ..does anybody know the exact numbers?

    Forget the banking business, just looking at zanaco property assets, it more than $8 million. These MMD street “Kaponyas” are selling the Bank like selling mines and council houses to sitting tenants. They don’t appreciate what went into building these things and as Sata puts it they have not even built a single public toilet since they came into power. Shame. You have made KK a hero he was not supposed to be

  5. The price was good. In Zambia we want to sell everything at 100%, which is silly.

    BCCI was sold at £1.

    Let RABO BANK takeover, that way we shall be promised of jobs and good running of the bank. all those people who like to employ their relatives and their village clans will now have to think again. Banks in Zambia are run like market stores, get professionals in and learn something.

  6. it is unfortunate that we still have Zambians with a mind set like ” Max” who believe that we need outsiders to run our economy.As a matter of fact ZANACO should never have been sold to outsiders,That was our national Pride. the reasons given for the sale are not convincing to say the least.

    As for jobs ,my brother wake up and smell the coffee which company in Zambia has ever been privatised and jobs have been created? Jobs will only be created for The Dutch expatriates. The whole management will be from Netherlands. Zambians need to be incharge of what is theirs.

    Max, you need to be professional yourself and not be emotional that is why our country has lost its pride and is being sold for nothing.If you have a grudge against banks that should not be a basis for them to be dispossed off for nothing

  7. Chilumba, Amro is now a target from Royal Bank of Scotland and other banks in Spain. Amro has investment in South America and other parts of the world.Chilumba, if you were to value Zanaco, what price tag would you put it at, considering the bad debts that it had written off the Ramcoz and other fallen companies. Consider your accounting equation for Assets,Capital and Liabilities ? Don’t forget too, the money Samuel Musonda was carrying in the boot of his car to State House for MMD campaign’s, and other political motives like Aaron and Katumbi.Already that supply of maize $7m, was from Zanaco accounts. Don’t forget, too, it’s Head Office was security from securing loans from other financiers.

  8. Mbulawa, i like your proudness .Keep it up my friend, we need people like you for Zambia to develop, explains why out of a population of 10 million plus, only less than 2 million are in formal employment. And of that 2 million, 60% are in Lusaka.Some people believe that nationalising companies will create employment. Nationalised companies only rely on govt subsidies my friend,how will they create employment. They do not believe in employment creation, i suppose you know why. The best hands are not in Govt, if they were, the businesses would hire them. How do you rate a job done by govt and that done by private companies like Phoenix contractors? Remember the roads you had before Phoenix resurfaced them for you.

  9. Kayata , firstly I would not sell Zanaco at all for the obvious reasons , I lost trust and interest in foreigners controlling our economy where the fiscal benefits are not tangible.What I could have done was improve the internal gorvanance of Zanaco of course shed off dead wood and introduce professionalism at the institution,RAMCOZ and the others their debts were secured aginst bonds so that could not have affected the valuation of liquid assets and bring up all non performing loans to book and pursue the perpertrators with no sympathy , incentives, innovation and excellence are key indicators for development.Mubulawa and I share the same views.What makes us believe Dutch chaps are better than our own? A debit will always be a debit whether in Holland or anywhere,for them to pursue this entity relentlessly they know that there is honey somewhere which we have failed to identify because of poor leadership.Underating our selves will not yield anything,Zanaco was our pride.

  10. In Africa, the Dutch (ABN AMRO) have branches in Egypt and South Africa, in Asia they are in China,Hong Kong,India, Indonesia, Japan, Kazakhstan, South Korea, Pakistan,Malaysia, Phillipines,Russia,Singapore, Taiwan, Thailand,etc, in North America, Canada, Mexico and USA and branches in Australia and New Zealand. The bank is Dutch based but the shareholders are English and American companies who are JP Morgan,AXA,Brandes Investment,Mellon Financials,Tweedy Brown,UBS AG,FMR,Harris Financial, Blackrock etc, and you have other mutual fund holders in the company.They are no major shareholders in ABN AMRO. No person/organisation holds more than 1.5% of the total shares.Chilumba, there is no under-rating, it is ourselves to blame, remember when people used to buy from Botswana,Zimbabwe and Tanzania in preference to local products. We know that bureaucracy is common in govt bodies. Look at our leaders, where is their money? in foreign banks. I would have loved Finace and local banks to..ctd

  11. I do agree With Chilumba, if RABO Bank wants to buy ZANACO so badly then it is a profitable and viable.It is a pity that Zambians cant recognise a jewel before them.The difference with foreign Companies taking over companies in other countries is that their respective Governments put measures in place to safe guard the employees and their rights.while in Zambia employee’s rights are left in the hands of fate.

    For instance when Barclays Bank took over ABSA in South Africa,the only difference to happen was at Board room level everything else remained unchanged. I doubt if the Authorities in Zambia have put anything in place to regulate Rabo Banks Operations.

    Let us not be short sighted and agree to RABO Banks conditions that they will maintain existing rural branches for 10 years. After that then what? Is Zambia going to be fully urbanised by 2017 so that we wont need a bank to service rural areas?

    Let us not sell our Country short, our children need it also

  12. The biggest culprits are the Govt official’s not the people buying companies. Take a look at ZCCM when it was bought by Anglo-American, where on earth have you seen a company not paying TAX for 5 years. Shoprite came in, and they did not pay TAX for 5 years. Where is the govt going to get it’s revenue from? Hence, now they are on Zanaco,Zesco and Zamtel funds. The political influence of the govt on parastatals is the reason why we should not keep such companies. Chilumba, the poor leadership is another under-rating. Why do you have to elect leadership which is poor and no vision.

  13. Kayata,Chikumbuso I share your concerns one opinion is a good compliement of another.Zambia has been mismanaged far too long for people to realise what is right or wrong for them but its you and I who are gifted with seeing things beyond the horizon.RSA sold seven companies and made huge savings for its social mitigation.We have sold 262 companies with nothing to the govt treasury,retrenchees have not seen a ngwee,technology has offset physical employment counter to job creation,abolished forex controls to make Zambia attractive,RSA still has kept lock on the forex controls,that is why Sata’s $27,000 was confiscated in our country he would have had fun,against this backdrop,I still feel we will keep watching foreigners developing their home countries when our country is put in high reverse gear.The siphoning of huge profits has greatly affected our exchange rates.You see why I hate these infestors when the rate dropped to 5000/£ they cried like kids in the kinder garden,contd

  14. so you can see the corporate greed, a country with manufacturing background is a dead one, we have been turned into a trading nation, our manufacturing sector is dead and yet is supposed to be the back bone of our economy.Regulation is another including the chaps who give work permits,a plumber will be employed from holland and be paid 100x our locally trained plumber from nortec,we are being colonised again in the form of liberalisation.Fundanga is the only bank chief who sees direction of Zambia, when he took over he insited we price all goods and services in kwacha and people took him for comedian those some of the home grown policies we need, not these bunus from Amsterdam.

  15. Chilumba, why should we allow foreign investors to dictate terms to us. Good example of Fundanga you have given. The problem with african’s is they despise their own. Talking about RSA, why is the economy for RSA falling now under black leadership when it has been opened to the world for trade? RSA was doing better during apartheid than it is today. Am not judging about colour of the skin, but just leadership. Why should RSA be doing better than Nigeria. Extreme patriotism.

  16. i beg to differ with Kayata, RSA has a home made tailored economy.Protection is still the basis of the economy. The economy is actually doing better now than during apartheid days.The wealth is now spread among all citizens unlike long ago when it was shared only among 5 million whites thus giving an impression that all was well.

    South Africa is the only country besides the US where its citizens are so proud of their country that anything foreign is treated with contempt.

    zambia should have a home grown economy strategy if it is going to get out of the doldrums.I still believe there is a chance to improve the economy but only if we have a domestic approach.
    ZANACO should never have been sold, just like the mines should have remained ours not given our to indians and the Chinese

  17. Kayata,RSA today is much finer and strong than before, when the Rand was becoming to strong, the conerned learned men and women sat down and drew guidelines to protect their exports which forms the cornerstone of their economy and this they managed to achieve because they value their country better.The proactive approach they took was to protect their manufacturing from collapse,home grown policy is the ay to go, global policies will only come in as supplements not as requiste.Botswana who is owed money by IMF,have taken a cautious approach to their assests, we just need a board of enquiry into this failed privatisation,it wont take us anywhere,the current situation Zambia is in will take long to recover,politicians will always brag about ficticious growth to stay in power, how can one really justify this stupid idea of growth when Zambia has 500,000 people in formal employment?I still dont believe that ownership change has done us any good.I was in RSA in December,its still a paradise

  18. Chikumbuso, the whites are coming back to Africa, in the name of Chinese and Indian’s because they have been welcomed there. Chikumbuso, what do you think should have happened to Zanaco? Remained a Parastatal,with the mind of a Zambian who is just focusing on stealing from LPM to the lowest clerk.
    Chilumba,the privatisation did not fail. What has failed is to manage that money realised from it.The Govt did not re-invest into the economy,but as we know, some people are in court over it,whilst some people have fled, whilst other’s have become Governor’s in other countries and one minister went to collect the money but blundered and has been fired. You know what happens when you give a homeless person money they have never dreamed of, that is what happened to that money.

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