INFRATEL Company limited, a Zambian telecommunications infrastructure company, has been hit hard by mismanagement and failure to generate revenue resulting in the loss of over K8 million.
A review of accounting and other records maintained at INFRATEL Headquarters in Lusaka by the Auditor General’s Office for the financial years ended 31st December 2020, 2021, and 2022, revealed that INFRATEL maintained a total of eighty-one (81) Telecommunication Towers in eight (8) provinces (Copperbelt, Central, Lusaka, Muchinga, Northern, North-Western, Southern and Western) that were not generating any revenue for the company as there were no customers that were using the towers.
In this regard, a total amount of K228,800 was spent to maintain the towers every month resulting in a loss of funds amounting to K8,236,800 during the period under review.
INFRATEL Company Limited was incorporated on 23rd August 2018 and commenced
operations on 1st October 2019 and is wholly owned by the Government through the
Industrial Development Corporation (IDC).
According to the report, On 1st June 2020, ZAMTEL and INFRATEL and the Government of the Republic of Zambia acting through the Ministry of Home Affairs entered into a novation agreement relating to the Colocation on Towers and Equipment Agreement executed between ZAMTEL and the Government of the Republic of Zambia dated 1st March 2019. Clause 4 (i) of the Agreement stated: “Subject to the agreed terms, INFRATEL shall replace ZAMTEL as a party to the agreement and shall from the effective date be bound to perform all the terms and conditions of the agreement as if it were the original party to the agreement.”
According to the AG’s report however, during the period under review, INFRATEL maintained 81 telecommunication towers in eight provinces that were not generating any revenue for the company as no customers were using them. The company spent a total amount of K228,800 to maintain the towers every month, resulting in a loss of funds amounting to K8,236,800.
Meanwhile, the company’s Statement of Profit and Loss and Other Comprehensive Income showed that INFRATEL recorded losses for three consecutive years. Although the loss was reduced by 10.8% from K3,138,630 in 2020 to K2, 944,516 in 2021. As of December 31, 2022, the company had accumulated losses of K5,577,179, representing an increase of 87% from K3,138,630 in 2020.
The auditor General’s report also indicate that during the period under review, INFRATEL operated with a negative working capital of K14,580,838 in 2020, K77,133,358 in 2021, and K89,764,846 in 2022, which meant the company could not pay off its liabilities when they fell due.
