FINANCE minister Mthuli Ncube says government will accelerate the reform of State-owned Enterprises (SoEs) and parastatals, starting with quick hits such as TelOne, NetOne and the People’s Own Savings Bank (POSB), which will be shed-off “in the next six months”.
BY FIDELITY MHLANGA
SoEs and parastatal reform is a key action to be taken under one of the five pillars of Ncube’s Transitional Stabilisation Programme (TSP) launched last Friday, covering the period October 2018 to December 2020
To court the best suitors and stimulate foreign direct investment (FDI), government has resolved to publish international tenders in the world’s biggest economies and other strategic jurisdictions.
“The urgency here is working on those that can be privatised. So, for instance, SoEs such as POSB are going full ahead with privatisation. For TelOne, NetOne, the same shall happen. Here, I am just mentioning a few. We will not hesitate to move with speed in the next six months so that we are able to get results and suitors to partner with these institutions,” Ncube said.
“I am insisting that we must advertise globally for all these transactions. In United States of America, the United Kingdom, Japan and wherever, to make sure that we get the best partners out there. It will enable us to get the FDIs that we so badly require and the best technology as well. It is not enough to advertise locally; in my view, we should go global.”
On April 10, 2018, Cabinet passed a resolution to restructure 47 parastatals and SoEs, which will see some being privatised, partially privatised or merged and others being liquidated or merged into ministerial departments.
The decision is an attempt to wean them from the fiscus and reign in unsustainable deficits aggravated by fiscal loans and grants to SoEs and parastatals.
“We have done work already in classifying them into various categories. Those that can be privatised will be privatised and transformed one way or the other; those that can be merged will be merged and those that can be departimentalised will be subsumed into existing ministries. We have categorised them that way,” Ncube said.
According to the 2015 Auditor-General’s (AG) report, the cumulative losses and net liabilities of SoEs and parastatals were in excess of $1 billion.
In the 1980s and early ’90s, parastatals and SoEs, which numbered around 107, contributed up to 40% to Gross Domestic Product, but this has since slumped to below 10%.
Since assuming the AG position, Mildred Chiri has pointed out glaring weaknesses in Zimbabwe’s public financial management system and exposed rampant plunder of public funds in government, SoEs enterprises, government institutions, parastatals and local authorities.
But neither Parliament nor government has acted decisively on her reports or its recommendations in the past, raising questions about the willingness of Zimbabwe’s political leadership to uphold and enhance accountability, transparency and good governance.
In the 2017 report of Article IV consultations, the International Monetary Fund noted that SoEs reform would improve their accountability, enhance service delivery and set them on a viable footing, reducing the burden on the national budget.