Government is working on a draft bill to empower the minister responsible for State Enterprises and Parastatals to enforce policy changes that aim to resuscitate the country’s struggling state-owned enterprises (SOEs).
Gorden Moyo’s State Enterprises ministry currently doesn’t administer even a single Act, rendering it ineffective in implementing policy changes.
Moyo said his ministry was failing to implement the corporate governance framework that Cabinet approved on October 13.
“The ministry is powerless to enforce policies because it does not have a single Act to administer,” Moyo said in a telephone interview.
“We have adopted the corporate governance framework but it cannot be implemented because it is just a policy which is not backed by an Act of Parliament. The ministry has no act of Parliament to administer which makes it difficult to enforce decisions and cross cutting measures, we need to give the ministry legal backing.
“However, the government is currently drafting the State Enterprises and Parastatals Management Bill that will give legal force to the framework so that it can be implemented.”
The corporate governance framework seeks to resuscitate all of the country’s 78 SOEs that have suffered gross decay due to mismanagement, but have great potential to generate 40% of the gross domestic product.
The framework covers such issues as boards and directors, culture, ethics, values and development, integrated reporting and disclosures, government role and corporate governance, compliance and risk management and specific requirements for SOEs.
“With the new Bill, we would want to review the pieces of legislation of parastatals that have no place in this day and age as they are archaic and not in line with the current economic trends. The Act will transform the parastatals into modern-style entities. The Act will give the ministry powers for norm-setting and cross- cutting measures,” Moyo said.