Parastatal reforms: Mnangagwa’s litmus test

SINCE his ascendancy to power more than a month ago, President Emmerson Mnangagwa has committed to undertake several measures to undo the many wrongs done by his predecessor, Robert Mugabe.

NEWSDAY COMMENT

These include commitment to deliver free, fair and credible elections, curbing corruption, reducing government expenditure and turning around the economy, among many others.

In the process, he has endeared himself with the majority of the citizens, who are yearning for a rapid change in fortunes after 37 years of misrule under the same Zanu PF regime, though under Mugabe’s captaincy.

This week, Mnangagwa’s government took another bold step of committing to reform or dispose of some perennial loss-making parastatals.

It should not escape Mnangagwa’s mind that the electorate is closely monitoring all his moves and pledges with a view to holding him accountable at the end of his first 100 days in office, or at most before this year’s general elections.

The ball is now in his court to stop politicking on such sensitive issues, but deliver if he is to be taken seriously as the reformer he purports to be.

It’s no secret that parastatal reforms are long overdue, given their well-documented loss-making history and being a perennial drain on the fiscus.

It also cannot be overemphasised that Mnangagwa is under pressure to deliver on his promises to ease spending on the budget and revitalise the economy and gain public goodwill ahead of the polls.

But there ought to be a difference between public politicking and delivery.

What is disturbing is that the parastatal restructuring programme has been on government’s agenda for the past three or so decades, but has continued to gather dust without implementation due to lack of political will.


As a result, State entities had turned into breeding grounds for corruption and feeding troughs for government fat cats, besides being used to finance Zanu PF activities — creating a conflation between the party and government.
The Auditor-General has produced numerous reports exposing maladministration and ineptitude in loss-making parastatals, but government appeared unmoved by the disclosures.

If in the 1990s, parastatals contributed at least 40% of the country’s gross domestic product, we wonder why they have now become a perennial burden on the fiscus.

Zimbabwe has 114 parastatals, whose capital stock stands at $14 billion, and if Mnangagwa’s administration is serious about turning the economy around, they must not just focus on the eight targeted parastatals, but shake up all of them and bring them to profitability.

Or better still, get rid of all non-strategic State enterprises in order to reduce the burden of funding them from the fiscus.

While it’s understandable that some parastatals are of strategic importance and government can’t dispose of its entire equity from them, these should be reconfigured and turned into profitable businesses by engaging professionals to run them as real business entities.

Here, we are talking of key institutions such as Air Zimbabwe and Zesa Holdings, to name a few.

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