Zimbabwe has set up an inter-ministerial technical committee to spearhead privatisation of State entities listed for urgent disposal, a Government source has said.
Finance and Economic Development Minister professor Mthuli Ncube in October last year gave some under-performing State-owned enterprises (SOEs) and parastatals — among them NetOne, TelOne and People’s Own Savings Bank (POSB) — between six and nine months to conclude privatisation or partial privatisation deals.
This came at the backdrop that the Government had spent half a billion dollars supporting struggling State entities over the last two years, but continued to make losses.
“The committee is expected to present its first update next week; a lot is happening,” said the source who cannot be named.
The Government since 2010, listed 11 State entities it earmarked for privatisation or partial privatisation but no deal materialised.
“These included Ziscosteel, Cold Storage Company, Zesa Holdings, Grain Marketing Board, Air Zimbabwe, Agribank and the Civil Aviation Authority of Zimbabwe. This time we are moving quite fast so that the deals can be implemented within the time-lines,” said the source.
“The appointment of the inter-ministerial committee will help us to come up with guideline to ensure we are not short-changed.”
State entities used to contribute 40 percent to the country’s gross domestic product, but poor management, corruption and weak governance systems have seen them run down with contribution to the economy plummeting to just two percent.
While on several occasions, Auditor-General Mrs Mildred Chiri, exposed rot in the state entities, the Government has failed to act on the damming findings. According to some analysts, poor performance of most State enterprises and parastatals was a reflection of inadequate oversight from some the parent ministries.
They also argue that the absence of performance-based employment contracts for most managers of SEPs and continued flouting of the Public Finance Management Act have all combined to breed a culture of incompetence at state-entities.
In the process, this imposes a huge burden on the tax payers as the losses they incur are eventually subsumed by the fiscus.