ZCF – cooperative for the rich

By Charles Mafa

Mr Chirwa insists that Lusaka Regional Trade Centre is 100 percent owned by the Zambia Co-operative Federation

Cooperatives are supposed to be owned by their members, and any profits distributed to them. But a MackanDay investigation has revealed that the Zambia Co-operative Federation has been secretly taken over by private interests, including wealthy members of the Zambian elite and non-Zambians.

The ZCF has over three million members, most of them poor workers. Those members are affiliated to ZCF through their primary cooperatives at district and provincial levels. Each province then contributes K5,000 to the ZCF each year in subscription payments. 

The ZCF was registered in 1973, as an initiative by the primary cooperative societies, government and donor organisations for the benefit of its members.

It sells itself as “an apex organisation supported by strong and industrious affiliates, engaged in viable economic activities able to uplift and sustain the living standards of members at all levels of the cooperative movement”.

What the cooperative does not say is that it uses the mostly poor membership for the benefit of foreigners and the Zambian elite, according to MakanDay’s investigation.

The cooperative also doesn’t point out that the Lusaka Regional Trade Centre is owned by China and some Zambian elites as ZCF Lusaka Regional Trade Centre.

A section of the membership has been complaining that they were defrauded or misled into supporting the idea of trade centres in which ZCF is planning to construct ten other regional centres in the country.

On 10 February this year, the Lusaka Union of Marketeers protested at the trade centre and demanded for immediate removal of the ZCF director general, James Chirwa. They accused him of evicting them from the centre which they say is “their own property”.  

During the protest at the trade centre, traders asked some important questions, including how after change of government in August last year, a billboard mounted outside the trade centre has suddenly disappeared.  

All this has occurred under the watch of government and the ZCF oversight structures such as the board, with unusually close ties to cooperative’s management, MakanDay Centre for Investigative Journalism has found. The investigation relied on public records, internal reports and several interviews, including with current employees of the cooperative.

According to ZCF executive director Mr Chirwa, the trade centre is supposed to be a “drop centre for commodities coming from small-scale farmers”.

“If a small-scale farmer is rearing goats, the goats will be slaughtered and put in the cold room, if a small-scale farmer is dealing with vegetables, the vegetables will be bought and stored in the trade centre,” he said. “So, if Shoprite wants a specific type of vegetable, they will go to the trade centre and purchase it.”

But the lands register show that the plot on which the trade centre, is built is now owned by ZCF Lusaka Regional Trade Centre. This is contrary to Mr Chirwa’s claim that the land is still under the Zambia Cooperative Federation.  

The shareholders of the ZCF Lusaka Regional Trade Centre, not the original ZCF, are Chinese and Zambian companies, individuals – led by James E. Chirwa, Loti Miti, David Kombe, Bulgarian – Dessislava Findlay, and two Chinese nationals – Wenfeng Pan and Ruina Li.

Title holder of the land, property number LUSAK/LN_15087/2, which was initially leased by the President in 2016, to the Zambia Co-operative Federation is the ZCF Lusaka Regional Trade Centre, according to the Lands Registry at the Ministry of Lands.

On 24 August 2017, the Zambia Cooperative Federation transferred the land to ZCF Lusaka Regional Trade Centre and the following day, the certificate of title number changed to CT_39231.

MakanDay has also established that the companies that have shares in ZCF Lusaka Regional Trade Centre are owned by some of the people who have shares in the same shareholding companies in their individual capacities.

The implication is that some shareholders are benefiting twice, through companies and as individuals.

For example, Lusaka Freezer Chain Technology Company Limited is owned by Mr Kombe, Mr Miti and Joseph Musampula, according to the Patents and Companies Registration Agency records.

Bumu Applied Technologies Company Ltd, which has the largest shares in the trade centre is owned by three Chinese nationals, holders of diplomatic passports – Mr Pan, Wenxiu Pan and Xiaoyan Liu.

Another company with shares in ZCF is D. Findlay and Associates, owned by Dessislava Findlay, a Bulgarian national and the Zambia Cooperative Federation Ltd. Zambian Cooperative Federation is the smallest shareholder in the land that was given to it by the state.  

Mr Chirwa told MakanDay that the Lusaka Trade Centre was built by a Chinese construction company.

“We were intending to get a loan from the Development Bank of Zambia (DBZ) and when we applied for that loan to build those warehouses, DBZ approved it, but later they said they did not have the money to finance it,” he said.

In addition, he said: “And the Chinese we had identified agreed to build it and that we should pay them from the business we are going to be doing there… and the invoices are in our office at every stage of the construction,” he said.

MakanDay has further established that though the company that built the trade centre is said to be Sinomine International (Zambia) Engineering Corporation Ltd, there was another Chinese company that started the process.

The three warehouses are said to have cost Zambia Cooperative Federation a whooping US$4 million from an initial cost of US$ 6.5 million. Insiders say the real value is supposed to be about US$1.5 million.  

It is not clear why the company that built the trade centre at US$ 6.5 million agreed to be paid US$ 2.5 million less. Mr Chirwa said the Zambia Cooperative Federation engaged a quantity surveyor who advised that the project cannot be US$ 6.5 million and that is how ZCF engaged the Chinese company to reduce the cost.  

Questionable link to another Chinese company

Although Mr Chirwa insists there is no link between the Presidential Milling Plant Initiative and the trade centre, it is not clear why Shandong Dejian Group Company Ltd, a Chinese company which supplied equipment and built over 1,500 costly moribund milling plants across the country provided part of the funds for the trade centre.

“There is no relationship with the President’s Milling Plant Initiative,” said Mr Chirwa. “The only reason why we have the presidential milling plant behind the warehouses is so that it can service people around that area with affordable mealie meal.”

The milling plants financed by the US$ 200 million loan from China, unveiled in 2015 and hyped by ZCF as “a plan for rural industrialisation,” were forced on farmer cooperatives across the country. The project, seen as another of ZCF’s wasteful projects was also used to promote then-President Edgar Lungu during his stay in power.

Mr Chirwa says the trade centre is supposed to be a “drop centre for commodities coming from small-scale farmers”.