Since 1990, one of the sticking issues in corporate governance of parastatals was the privatisation of the State-owned enterprises.
Comment: NewsDay Editor
The argument then was that they were a strain on public finances and were not profitable enough to be run by the government and privatisation would make them more efficient.
Critics of this model were sceptical, warning that this would increase prices of basics and place them out of the reach of many people.
To add onto that, they decried what they deemed to be a neo-liberal agenda that was pushing for profits ahead of the basic needs of the population.
This argument prevailed and the government is still in charge of most parastatals.
Some have been partially privatised, but by and large the government retains control of these institutions.
Yesterday’s newspapers were awash with how parastatals’ losses double annually, while the Grain Marketing Board was reported to have spent $8 million on illegal expenses, following audits released by Auditor-General Mildred Chiri.
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While parastatals were initially meant to cushion the poor and keep prices low, it seems they are now an avenue for looting and plunder.
Even if they are loss-making, their executives continue to earn ridiculous salaries and efforts by the government to put a salary cap have so far been in vain.
In the current environment, there can be no justification for the government to continue clinging onto parastatals because they are bleeding the economy dry.
Parastatals, the 107 of them, are said to have made losses of $340 million – 2,1% of gross domestic product – which should be more than enough for the government to raise the red flag and start acting.
Zimbabwe’s economy cannot afford to continue subsidising these parastatals and there is need for an honest conversation on how to stop the bleeding before it brings the country down.
Parastatal reform has been long overdue and it is time government considered letting go of these entities.
If not, then the authorities need to allow parastatals to operate like commercial entities, where the emphasis is on the bottom line and efficiencies.
Boards and management of such enterprises should be set up in a professional manner, with no room for nepotism and patronage.
Parastatals that continue to report losses should be cut off, or at least there should be a change of management, with the best brains brought in.
State-owned enterprises should cease being treated as a piggy bank for ministers, but rather there should be a clear divide between a ministry and a parastatal, where bureaucrats have no room and are not allowed to plunder these companies.
If everything fails, then there is no harm in resuscitating the privatisation agenda, as this could be the only way to save the parastatals and to stop the bleeding.
