HomeOpinion & AnalysisColumnistsComment: Reform Noczim for efficiency

Comment: Reform Noczim for efficiency

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Just recently the MDC-T wrote in its newsletter, The Changing Times, that the National Oil Company of Zimbabwe (Noczim) would be privatised.

The newsletter, quoting Energy and Power development minister Elton Mangoma, who is also the party’s deputy national treasurer, said the hiving off of Noczim was part of the MDC-T’s parastatals reform strategy.

The reforms — according to the newsletter — should also affect other loss-making quangos including Agribank, Air Zimbabwe and the Grain Marketing Board.

The selling off of parastatals which are hemorrhaging the economy is a welcome development but it has to be done properly, with clear deliverables and benchmarks.

We do not believe that the execution of the Noczim reforms is being handled properly by the incumbent ministry.

The reforms have started on a bad note. The ministry as part of the reforms has already formed two successor companies, Petroltrade, which will take over national fuel importation and Noczim service stations countrywide.

The other company is the National Oil Infrastructure Company of Zimbabwe which will own and manage oil infrastructure such as Masasa, Feruka and Mabvuku storage tanks and the oil pipeline from Harare to Feruka.

The enabling legislation to effect the change is contained in the Energy Regulatory Bill which passed through the lower house in December.

The Senate passed the Bill last week and it is still to receive presidential assent.

But ministry, we understand, has already gone ahead to form the successor companies and to appoint senior managers.

Petroltrade managers, notwithstanding the legality of their tenure in office have started on the wrong foot.

They, as has been reported, tried to import fuel into the country worth $4,4 million without going to tender.

The deal has flopped because the supplier has not delivered.

This is a huge embarrassment for a minister who is trying to demonstrate that a new dispensation is nigh in the fuel sector.

The minister is on record as saying government is looking for “an equity partner though we are yet to come up with the actual figure of the kind of investment we require”.

He added: “Several companies have shown interest in the project. All we want are serious investors with Zimbabwe at heart; it does not matter whether the investors are locals or foreigners.”

Minister, what is required at the moment is for the government through your ministry to demonstrate a measure of diligence in its quest to privatise Noczim.

The chain of events as stated above is no assurance whatsoever that the reforms are a game-changer. This is the sort of stuff that chases away potential investors.

We saw it in 2001 when the government unbundled Zesa into five companies as the first step to bring in private equity in the power sector.

This was a monumental disaster as no investor showed real interest.

The successor companies continued on the same trajectory of inefficiency and the result was a quest by government to reverse the reform process which put paid any chances of investment in the sector.

Noczim reform can easily trek the same route as long as the ministry fails to adhere to procurement procedures.

Parastatals’ reform should bring greater efficiencies, which should attract private investors and the creation of wealth.

As things stand, there is real danger that Noczim is going the Zesa route.

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