via Government moves to stem rot at parastatals July 25, 2014 by Ndamu Sandu
GOVERNMENT plans to amend the Public Finance Management Act to give the Ministry of Finance and Economic Development more powers to oversee parastatals and local authorities as far-reaching reform to stop the rot at the entities.
This comes when good corporate governance practices have been alien at parastatals with some having gone for years without producing audited financial results.
In a letter to the International Monetary Fund (IMF), Zimbabwe said the amendments would require all public entities to submit their corporate and financial plans to the Finance and Economic Development minister before the beginning of the new fiscal year.
“The Minister of Finance and Economic Development will be given powers to direct boards to amend the corporate and financial plans if necessary,” Zimbabwe said in a letter to IMF managing director Christine Lagarde.
The letter was jointly signed by Finance and Economic Development minister Patrick Chinamasa and Reserve Bank governor John Mangudya.
Zimbabwe said the amendments would “direct public entities to submit quarterly financial statements and performance reports not later than 30 days after the end of the respective quarter”.
“In addition, we have started reviewing the Procurement Act, with the objective of tightening our public procurement framework and making it more transparent,” it said.
Government has been turning the screws on parastatals and local authorities after revelations that some executives were earning fat salaries and allowances when their entities were loss making and staff at the lower ranks unpaid for months.
In March, government announced that it was capping salaries of parastatals and local authorities’ bosses at $6 000 per month.
The directive could not be implemented as it had no legal force.
Early this month, Chinamasa announced that Treasury would have the final signature on loans contracted by local authorities and parastatals to curb the recurrence of borrowings not meant for key projects like infrastructure.
Zimbabwe is reeling from a total domestic and external debt of $9,9 billion which it was failing to service militating against efforts to get fresh lines of credit needed to reboot the economy.
Of the total debt, $6,9 billion is public and publicly guaranteed meaning that it had been secured with government guarantees.
COMMENTS
Oh REALLY!? More lip service from ZANU PF. How many times have we heard that this current government is going to do this & that for the benefit of the nation? It’s a load of rubbish, they are not just clueless, but they have no intention of doing what is good, nor what is right. To ‘stem the rot’, there is only one way – and that my people is for ZANU and all their thieving ministers/president to GO!! Is there anyone out there who really believes any of this nonsense? Imbwa dzevanhu!
Good corporate governance in parastatals when, its alien in Government proper- wishful thinking is akin to day-dreaming.
“Government moves to stem rot at parastatals” What an inappropriate statement. How do you stem the rot on a bone. That is after all what is left of the parastatals. Skeletons, that’s all that is left. Skeletons do not rot. They just show what the skeleton used to be. The Parastatals need a new start free of all the Vultures that stripped them of their flesh. How do you do that when the Vulture still circle the skeleton.
Lip service for sure. This is meant to wood wink the IMF. As Zanu survives on corruption, nothing will happen ,intact there will be more corruption and they will all turn a blind eye.
Having worked for ESC then we all know there was no power cuts etc. Once Zesa came guess what. WE ARE FACING CUTS ETC. So Zanu dont try and pull the wool over our eyes. YOU ARE SIMPLY USELESS.
The problem is Zanu Pf is a slave of their own nature….they are not in a position to help themselves.corruption and grabbing is condoned saka it won’t work.
all zimbabwe govt parastatals make a loss and have been doing so for decades – now with US dollars only the chickens are fast coming home to roost – dodgy banks that have been lending your dollars ( yes you zimboes with USD in the banks) to ZW govt will sooner or later go broke
ZANU is the rot. Are they going to exterminate themselves? It would be nice of them if they did
I know it might not happen in my lifetime, but I’d like to see the government privatising all non-essential service provisions, so they can focus on delivering a basic environment that allows business to prosper. For example, the government should privatise the NRZ, and just remain in charge of the railway infrastructure itself. NetOne/TelOne, Air Zimbabwe, ZBC, ZESA, Grain Marketing Board….they should all be private companies open to fair competition. They can then focus on offering basic health services, roads, electricity infrastructure, state pensions, etc
They can even do it in a way that takes the indigenisation objective forward, by insisting on the 51/49 rule. Even if these companies were bought by a handful of powerfully connected officials, they would ensure that they are run properly because it will be their money on the line now, not the taxpayers. If they are run poorly and fail, competitor firms will come in and take over.
How would it be funded? That’s where the diaspora can get involved – pumping in their money to take control of those companies. Asking them to borrow the government money will never work, but they’ll be more willing to buy some treasured institutions off them. It might also entice the billions hidden outside the country by politicians to find its way back into Circulation in Zimbabwe. The big dogs will definitely want a piece of the action. Foreign money will flow in to buy the 49% stakes if the environment is right.
I might not see any of this happen in my lifetime.
zim $ is on its way back!!