Businesses have welcomed Government’s move towards reforming some strategic State enterprises as they are key enablers to industry performance and overall economic growth.
These should see the country meeting the objectives of the Transitional Stabilisation Programme (TSP) and Vision 2030, which is designed to turn Zimbabwe into an upper middle income economy.
This week Cabinet approved the re-bundling of the Zimbabwe Electricity Supply Authority (ZESA) and resolved to merge all the group’s units into a single integrated company.
Work is also underway to revive Air Zimbabwe with a resolution passed to acquire four aircraft from Malaysia worth $70 million.
The Grain Marketing Board (GMB) will be split into two entities — a commercial business entity and another responsible for the Strategic Grain Reserve function.
Business representative bodies who spoke to The Herald Business, said these reforms were crucial in enhancing efficiency and service delivery within these strategic organisations, which will have a positive impact on industry performance.
Utilities such as energy, for instance, are one of the major cost drivers for industry while the transport system and the GMB are also key to Zimbabwe, which is an agro-based economy.
Confederation of Zimbabwe Industries (CZI) president Mr Sifelani Jabangwe said the implementation of the reforms would be key to ensure the desired results, which should cascade to in dustry.
“These institutions are enablers and strategic to business. Reviving AirZim into an efficient airline is critical in ensuring connectivity with key markets and investors,” said Mr Jabangwe adding that a vibrant rail system will also be help local industry.
“Transport is key for industry and currently the bulk of goods are transported by road, which is expensive especially cross-border transport services,” he said.
The reforms that will be carried out are in sync with the Public Enterprises Reform Framework for 2018-2020 under the auspices of the TSP.
National Business Council of Zimbabwe (NBCZ) president Mr Langton Mabhanga said Government was making a strategic move consistent with world class corporate renewal.
“This represents fulfilment of a critical milestone of the TSP. The expectation is the much needed follow-through action of robust, efficient, cost-effective corporate board constructs.
“Tough decisions must be made where necessary, far from accommodating redundant persons or positions,” said Mr Mabhanga.
The reforms will be instituted at most public entities in a move to bring efficiency, good service delivery and cut on corruption. New efficient boards are also expected to be appointed to these entities to help them turn around their fortunes.
Some public entities had become inefficient, debt ridden due to mismanagement and poor corporate governance.
Zimbabwe National Chamber of Commerce (ZNCC) chief executive officer Mr Takunda Mugaga weighed in saying these entities and local industry were intertwined. An inefficient energy service provider and GMB would be a damper to industry and the agriculture sector.
The re-bundling of ZESA, for instance was long overdue, he said.
Said Mr Mugaga: “Streamlining and setting up a vertical structure for ZESA will be the first step to restructuring it. All those subsidiaries had boards which was unnecessary and increased administration costs instead of maintenance.
“A leaner board should be set up by the Parliamentary Portfolio Committee on Energy not just the minister alone,” he said.
On GMB, Mr Mugaga said the firm was better off as it is.
“GMB is a smaller entity on its own and I do not see why it should be separated. Actually, I think it would be better to merge it with the Agriculture Marketing Authority (AMA),” he said, adding GMB’s main challenges were not operational but caused by poor pricing of agriculture commodities.
Government is planning sweeping parastatal reforms that are likely to see some of them being relagated to departments in ministries, while others will be commercialised.