The Sunday Mail
Sharon Munjenjema
Last month, Government announced a raft of reforms of State enterprises and parastatals which, among other interventions, will see dissolution and liquidation of some entities.
Some parastatals will be privatised while others will be absorbed into their line ministries.
Ministries must produce detailed self-assessments and proposed strategies to turn-around parastatals under their purview.
Finance and Economic Development Minister Patrick Chinamasa has made proposals on how these reforms will be implemented.
Of note is the decision to merge the Special Economic Zones Authority, the Zimbabwe Investment Authority, ZimTrade and the Joint Ventures Unit into a one-stop shop for investors.
The move is designed to improve ease of doing business by reducing red tape.
Lessons are being drawn from Rwanda, which has transformed from being a country torn by civil war in the mid-1990s to being the second best country in Africa to be business in, according to the Global Entrepreneurship Index.
The successes recorded in the small country have been driven by the Rwanda Development Board, among other factors, which can facilitate establishment of a foreign business a mere six hours.
The Zimbabwe Investment and Development Authority, the proposed one-stop investment centre, will similarly seek to reduce the time it takes to get a business up and running.
But these reforms alone will not change the economy in the absence of reforms to State enterprises and parastatals (SEPs).
The contribution of SEPs to Zimbabwe’s GDP has reportedly plunged from 40 percent in the 1990s to about 11 percent in recent years.
Deputy Chief Secretary in the Office of the President and Cabinet Dr Ray Ndhlukula is on record saying that the 107 SEPs in Zimbabwe, the majority have not produced audit reports in the past decade.
Reports from the Auditor-General’s Office routinely expose mismanagement and financial rot at SEPs.
Take power utility Zesa Holdings for instance.
It’s subsidiary, the Zimbabwe Electricity Transmission and Distribution Company, paid a fellow subsidiary Powertel close to $10 million as commission for selling prepaid electricity to wholesalers.
Is such an elaborate and costly set up necessary?
Another subsidiary, Zesa Enterprises, has salary arrears of over US$100 000 but still exceeded its $300 000 corporate social responsibility budget by $934 241 while making “donations” that were not supported by company policy.
President Emmerson Mnangagwa’s Government has responded by merging the ZETDC, Zimbabwe Power Company and Zesa Enterprises boards.
This is a good start.
In reforming SEPs, Government must remain acutely aware of the need to protect certain services which, if privatised, will become too expensive for ordinary people.
These include health, water and electricity.
Then there are other sectors that Government must seriously consider privatising, and in this context a case can be made for Air Zimbabwe.
Yes, having a national flag carrier is a source of pride, but is it worth the hundreds of millions of public funds that have been lost to Air Zimbabwe?
Having a couple of planes is fine, but te skies should be opened to private carriers, or Air Zimbabwe should sell some shareholding to other aviation players .
Then there are entities that need to be folded into their line ministries, such as was done for the Censorship Board that has now been made a department in the Home Affairs Ministry.
As the nation waits for the Public Entities Corporate Governance Bill to be passed by Parliament, it is incumbent upon all relevant officials to start working on how the best value can be obtained from SEPs.
