HomeNews97 parastatals pay govt measly dividend of $1,7m

97 parastatals pay govt measly dividend of $1,7m


SHOCKING revelations were made this week before Parliament by State Enterprises Restructuring Agency (SERA) executive director Edgar Nyoni that only two State enterprises and parastatals (SEPs) paid dividends to government in 2014, a measly $1,7 million.


Nyoni also told chairpersons of Parliamentary Portfolio Committees and senior officers from the Office of the President and Cabinet that 84 out of the 97 SEPs reported their results for 2011 to 2014.

He said SEPs had been draining the fiscus through seeking government financial bailouts through Treasury Bills, yet some of them were commercial entities that should be paying dividends to the shareholder.

“In 2014 government transfers to the 84 SEPs represented $402 million. Of this amount $85 million went to the commercial SEPs, and $318 million was allocated to non-commercial SEPs,” Nyoni said.

All this failure by SEPs has been attributed to gross mismanagement, lack of good corporate practices and hefty salaries earned by chief executive officers, among several issues.

The energy and transport sectors have been failing to make profits.

“For commercial SEPs, the energy sector accounted for the greatest losses with 38%, followed by the transport sector with 28%, and the agricultural sector with 25%. The mining and financial services sectors are the only two sectors that paid dividends to the shareholder,” Nyoni said.

Such perennial losses, Nyoni said were draining the fiscus through issuance of Treasury Bills to financially bail out the comatose SEPs.

While performance of most SEPs dwindled through graft, surprisingly media reports in 2014 were awash with stories of bosses at parastatals such as Cuthbert Dube (former Premier Service Medical Aid Society CEO) reportedly earning a hefty salary of $230 000 per month.

Chairpersons of Parliamentary portfolio committees like Paurina Mpariwa (Public Accounts), David Chapfika (Finance) and Irene Zindi (Local Government), and Michael Nyambuya (Human Rights Thematic) said they were surprised that during the Rhodesian era SEPs posted dividends to government even though under sanctions.

“Are we giving quality guidance as government and supervising these parastatals, or are we interfering with their operations as government?” Nyambuya queried?

To effectively deal with graft at SEPs, President Robert Mugabe this week announced that during the Fifth Session of the Eighth Parliament, the Public Entities Corporate Governance Bill will be brought before Parliament for crafting to curb corruption and extravagance by executives at SEPs, among other issues.

Ambassador Stuart Comberbach, the chairperson of the Corporate Governance Unit in the Office of the President and Cabinet (OPC), says this Bill is a welcome move as it will curb such profligacy by chief executive officers of SEPS, and also restrict the terminal benefits payable to parastatal bosses when they retire.

Comberbach told MPs during a meeting of chairpersons of Parliamentary Portfolio and Thematic Committees with senior staff of the OPC to discuss the Bill that the envisaged law would also underline terms of office of boards, and will require chief executive officers and senior managers to enter into performance contracts.

“The Bill will require every entity to establish a strategic plan, and part 3 of the Bill will deal with the tenure of boards so that a person can only sit on a board for eight years, which is two terms of four years, and that no person will sit in more than two boards of public entities. Our corporate governance survey revealed a situation where an individual sat in more than six boards,” he said.

Chairperson of the Mines and Energy Portfolio Committee Daniel Shumba said the Bill must emphasise on the performance of the CEO or board members rather than the number of terms that can be served.

But, MPs like Dexter Nduna (chairperson of the Transport Parliamentary Portfolio Committee) feel that in a country of 13 million educated Zimbabweans, board terms should be limited.

Chairperson of the Parliamentary Portfolio Committee on Health, Ruth Labode added: “The issue of having boards at hospitals must be done away with because it is inundating on public finances that must go to patients. Why should a hospital CEO even drive a Prado?”

Lillian Timveos, who chairs the Parliamentary Thematic Committee on HIV/Aids, said the Bill must ensure there are stringent measures to deal with executives that have drained SEPs through awarding themselves hefty salaries.

Accountant-General Daniel Muchemwa said even the Auditor-General (AG) Mildred Chiri’s 2016 reports revealed a very miserable picture of the performance of SEPs, with 30 of them recorded as having failed to submit their accounts for auditing.

He said millions of dollars were reported by the AG as having gone missing through procurement scandals, adding that he would soon bring before Parliament a document to name and shame SEPs inundated by graft.

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