The International Monetary Fund (IMF) is prepared to lend the Zambian government a US$1.2 billion economic bailout on condition the country sells ZAMTEL.
According to official documents seen in Lusaka, the IMF has made the sale of Zamtel a prerequisite because of the substantial amounts of money being used to try to recapitalise the loss-making firm.
A team of IMF officials is in Zambia for consultations over a possible bailout package for Zambia.
Other conditions set by the IMF include the removal of subsidies on fuel and electricity.
The government recently transferred the management and operation of Zamtel to the Industrial Development Corporation (IDC) after failing to secure US$300 million investment in the company to make it viable and be able to compete with MTN Zambia and Airtel Zambia.
In 2010, the company was sold to LapGreen Networks of Libya by the previous government after failing to recapitalise it after which the current administration repossessed the company in 2012 claiming there was corruption in the original sale.
And since 2012, the company has been making losses and is technically insolvent, according to the 2014 Auditors General’s report.
Zamtel is the country’s smallest operator with less than two million customers.