The Confederation of Zimbabwe Industries (CZI) has lobbied government to move the privatisation of parastatals to the Vice-President’s Office considering the contribution of parastatals to the gross domestic product which is estimated at 40%.
This comes as the World Bank has also called on government to either publicly list parastatals, state-owned enterprises (SOE) or look for strategic partners for them.
The move of privatising SOEs from ministries to the Vice-President’s Office will reduce conflict of interest between the parent ministries and the parastatals involved.
“There is need for a higher governing power to oversee the whole exercise. Real action needs to be taken in respect of parastatals and their tariffs. There can be no economic growth with the parastatals in the condition in which they find themselves,” CZI said in astatement .
“Privatisation and listing of parastatals on the Zimbabwe Stock Exchange provides everyone a chance to participate in initial public offerings and rights issues and this cultivates a culture of investing and savings, thereby deepening the scope of the local bourse.”
The business representative body said there has been talk of the privatising parastatals but no action has been implemented on the ground.
Currently, the privatisation of parastatals is being done by the Ministry of State Enterprises and Parastatals and parent ministries and the companies involved.
CZI advocated for government to carry out research identifying barriers to doing business and propose reforms to address obstacles. Zimbabwe is currently ranked 158 out of 181 economies in the Ease of Doing Business ranking.
“Government should engage the Africa Development Bank to fund a diagnostic review of impediments to doing business in Zimbabwe with recommendations on what can be done to improve matters?” CZI said.
Local companies are currently struggling with power shortages, high cost of inputs, difficulties in accessing lines of credit, low capacity utilisation, which is around 35%, and logistical constraints of moving raw materials from source plant to the finished product market. CZI lobbied government to put in place export incentives to encourage local manufacturing and secure former markets.
“Government could introduce a lower tax rate, say 15%, for turnover from exports. Tax allowances on new capital machinery to stimulate the replacement of obsolete manufacturing capacity in manufacturing,”CZI said.
CZI advocated that government should issue a Statutory Instrument that demonetizes the Zimbabwe dollar and mint our own US dollar equivalent coins backed 100% by US dollar reserves.