The Sunday Mail
Levi Mukarati: Deputy News Editor
Government is pushing for the introduction of a robust legislative framework to curb gross mismanagement and corruption that has become synonymous with most public entities. The move comes as plans are underway to refine and decentralise the public procurement system, which had loopholes that were being abused by State company bosses and their cronies.Despite the Government auditor raising a red flag — for many years — several senior parastatal managers continue to loot the enterprises in the absence of tight regulatory mechanisms.The Auditor General’s 2015 audit report recently exposed mismanagement and looting of funds in state enterprises.
Public companies such as Zimbabwe National Road Administration (ZINARA), Zimbabwe Revenue Authority (ZIMRA) and TelOne have been fingered in gross abuse of resources funds.
Cases such as Zimra’s prejudice of the Government of nearly US$1 million in presumed false input tax claims that were processed in 2014 remain unsolved. In the same vein, officials at Zinara are alleged to have made payments to contractors amounting to over US$3 million for Initial Payment Certificates without the approval or certification of responsible personnel.
The cases are just a tip of the iceberg of the rot in State companies.
But President Mugabe said mechanisms were being put in place to ensure the honeymoon days are over.
Opening the Fourth Session of the Eighth Parliament in Harare last Thursday, the President said public enterprises needed reformation.
“The reform of State enterprises remains a critical lever in the country’s economic turnaround process,” said President Mugabe.
“I note with satisfaction, that Arda is now on a recovery path, thanks to its joint venture partnership with some local private sector players.
“Government recently approved a turnaround plan for Cold Storage Company, as part of the programme to revive the country’s beef industry. The Public Entities Corporate Governance Bill which will foster adherence to good corporate governance by the public sector entities, regulate remuneration packages for Boards and senior members as well as enhance transparency in the financial affair of public entities, will be tabled in this August House during this session.
“This Parliament will also be expected to consider the Public Sector Procurement Amendment Bill, which will seek to improve efficiency in the public procurement system through decentralisation of the procurement function to ministries, state enterprises, parastatals and local authorities.”
A consultant on good corporate governance, Mr Proctor Nyemba, said corruption in state enterprises has reached alarming levels and there is need “to act as soon as yesterday”.
“The systems being put in place to guard against abuse of funds and resources in public companies are welcome because there were so many loopholes.
“For example, procurement managers were not registered and this meant if they were charged with corruption at a certain company, they would continue operating without a body to take action against them.
“If the proposed amendments are passed by Parliament and implemented, we are certain of having more investors coming,” said Mr Proctor. In his address to Parliament, President Mugabe said the economy is facing a number of challenges such as subdued aggregate demand, high interest rates and low foreign direct investment.
He said measures were being put in place for economic revival. “…This (the economic challenges), too, is further compounded by low revenue collections arising from depressed production, rampant revenue leakages as well as poor mineral commodity prices on the global market,” said the President.
“As a consequence, the economy registered a gradual decline, with the estimated growth rate for 2016 now projected at 1,2 percent.
“Government, in the context of ZimAsset, is implementing a battery of initiatives to address the prevailing economic challenges.
“For instance, it has embarked on the ease of doing business reforms with the objective of improving the local business environment that stimulates investment inflows.
“In line with this thrust, a new Companies Act, which will significantly reduce registration delays and facilitate the smooth operation of new business, will be tabled for consideration during this session. The president said legislators had a sacrosanct duty to enact laws and implored on them to also adhere to the regulations.
