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NewsDay

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Parastatals owe $1 billion

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INTER-PARASTATAL debt has reached $1 billion as State-owned entities continue to struggle to stay afloat, it has emerged.

INTER-PARASTATAL debt has reached $1 billion as State-owned entities continue to struggle to stay afloat, it has emerged. By our Staff Reporter According to a progress report on the State enterprises and parastatals (SEPs) reform programme produced by State Enterprises minister Gorden Moyo, the debt had been a major challenge to most government-owned businesses.

Moyo said this had led to cashflow problems, inability to attract investors and access to lines of credit due to unattractive balance sheets.

“Inter-parastatal debt is by now over $1 billion when government departments and local authorities are included,” he said.

“In this regard, it is important to note that government has started to engage SEPs to implement some of the mechanisms for clearing inter-parastatal arrears through government paying an estimated $124 466 249 to SEPs who, in turn, will pay their statutory obligations to Zimra (Zimbabwe Revenue Authority).”

Moyo said the State enterprises sector had been beset by multilayered challenges including amplified liquidity challenges, undercapitalisation, debt overhang, recurring power outages, lack of lines of credit, inadequate funding for plant retooling and upgrades.

He said it was encouraging to note that most prarastatals had been able to pay their salaries on time with the exception of the National Railways of Zimbabwe, Cold Storage Company and Air Zimbabwe where employees had salary arrears dating back several months.

Even though some companies recorded losses, Moyo said the State-owned enterprises showed signs of turnaround as they managed to reduce the level of losses.

The SEPs who significantly reduced their losses during the period under review included Agribank, which improved from a loss of $8 million to $286 000, and Grain Marketing Board, which improved from a loss of $18 million in 2010 to a loss of $6 million in 2011.