When A State Enterprise Refuses to Innovate. The Case of ZAMPOST
In the 1990s, ZAMPOST was a cornerstone of Zambia’s communication and financial infrastructure. As a student at a boarding school, the only reliable ways to receive money were through services like MoneyGram and Money Order, which made ZAMPOST indispensable for many Zambians.
As the sole entity responsible for most financial transactions and mail services, ZAMPOST had significant potential to evolve and meet the demands of a rapidly changing world.
Yet, despite the opportunities presented by the digital revolution in the early 2000s, ZAMPOST remained stagnant—clinging to outdated business models and failing to innovate. Today, we witness the repercussions of that inertia as the company continues to struggle, a shadow of what it could have been.
At the dawn of the digital age, countries like Kenya and Tanzania quickly recognized the need for adaptation and innovation. Kenya’s Safaricom revolutionized the financial sector with mobile money services like M-Pesa, which has become a resounding success.
By contrast, ZAMPOST, which was well-positioned to lead Zambia’s digital transformation, chose the path of least resistance: business as usual. As the world moved forward, ZAMPOST remained shackled by its old ways, missing critical opportunities that could have made it a competitive player in today’s digital economy.
One of the most glaring missed opportunities was in the field of mobile money. While Kenya and Tanzania were encouraging their local entrepreneurs to develop and dominate this space, Zambia allowed foreign companies to establish a foothold in the market.
Today, foreign-owned telecoms dominate mobile money services, leaving ZAMPOST to watch from the sidelines. If ZAMPOST had embraced the mobile money revolution, it could have played a pivotal role in financial inclusion, especially in rural areas where access to banking services remains a challenge.
Another area in which ZAMPOST could have thrived is the courier and logistics sector. With its widespread network of post offices and infrastructure, ZAMPOST had the potential to develop a last-mile courier service capable of delivering goods directly to people’s doorsteps.
This would have put ZAMPOST in a position to compete with private courier companies and capitalize on Zambia’s growing e-commerce market. Instead, ZAMPOST failed to modernize its delivery services and remains largely irrelevant in today’s fast-paced world.
ZAMPOST also missed an opportunity to dominate the public transport sector. At a time when the private transport sector was booming, ZAMPOST could have offered a reliable and affordable intra- and intercity bus service.
In other countries, public transport systems that rely on larger buses have proven successful due to economies of scale, providing an affordable alternative to private mini-buses. A state-run public transport system could have reduced transportation costs for the public while generating revenue for ZAMPOST. However, the company remained locked in its traditional role, missing this chance to innovate.
The underlying issue is not just about ZAMPOST’s failure to innovate, but a broader systemic problem in how Zambia treats its state-owned enterprises (SOEs). Rather than creating an environment that encourages growth and innovation, the Zambian government has prioritized foreign investment over supporting its own businesses.
The telecoms sector, for example, is dominated by foreign-owned companies, with little room for Zambian entrepreneurs to flourish. In contrast, Kenya imposed quotas that ensured local companies had a stake in the telecoms sector, which has allowed homegrown innovations like M-Pesa to flourish.
This trend of neglecting local industries in favor of foreign investors extends across sectors, from mining to agriculture. In the mining industry, incentives are often granted to large multinational corporations, while local Zambian miners struggle to compete.
Similarly, in agriculture, the focus is on commercialization and mechanization for large, foreign-owned farms, while local farmers are left to fend for themselves. This creates a lopsided economy in which foreign capital thrives, while local businesses are starved of the support they need to grow.
Countries like Kenya have demonstrated that when governments create favorable conditions for local businesses, entrepreneurship thrives. The success of local innovations like M-Pesa proves that with the right support, homegrown businesses can compete on a global stage.
Unfortunately, Zambia’s policies tend to prioritize foreign companies, leaving Zambian enterprises like ZAMPOST to languish.
The future of ZAMPOST and other state-owned enterprises in Zambia lies in the government’s ability to foster an entrepreneurial ecosystem that supports local innovation. It requires deliberate policies that reserve certain industries for Zambian businesses and provide incentives for local companies to grow.
The success of economies like China, where the government actively supports local businesses, shows that such an approach can pay off. Many of China’s largest corporations started small but grew rapidly due to massive government backing.
In Zambia, we need to move away from the mindset that foreign investment is the only path to development. While foreign capital is important, it should not come at the expense of local businesses. If Zambia is to build a sustainable economy, the government must take deliberate steps to promote local industries, provide incentives for innovation, and create a level playing field for Zambian entrepreneurs.
ZAMPOST’s failure to innovate is a cautionary tale about what happens when state-owned enterprises refuse to evolve. But it’s not too late for Zambia to change course. With the right policies in place, ZAMPOST and other SOEs can still become engines of growth, creating jobs, driving innovation, and contributing to the country’s long-term prosperity.
It’s time for Zambia to stop throwing its local businesses to the sharks and start giving them the support they need to thrive.
