10 September 2017
HARARE – President Robert Mugabe’s admission that government has been
carrying the burden of most parastatals that were under-performing must
have been surprising for many.
Mugabe disclosed during an interface meeting with business at State House
on Thursday where he also said Cabinet had decided to close parastatals
because, instead of contributing to economic development, the State-owned
companies have become a burden on the fiscus.
However, one wonders whether it would have taken this long – close to four
decades now – for Mugabe to see that parastatals were bleeding the
national economy as they are plagued by high overheads, inter-parastatal
debts, maladministration, undercapitalisation, poor corporate governance,
nepotism and corruption among other ills.
In her State Enterprises and Parastatals Report of 2016, Auditor-General
Mildred Chiri named Zesa Holdings (Zesa) and its subsidiaries; TelOne,
Grain Marketing Board (GMB), National Railways of Zimbabwe (NRZ), Zimbabwe
National Water Authority (Zinwa), and others as the main State-owned
entities draining Treasury without contributing anything towards the
Perhaps Mugabe’s Zanu PF government should have first tried to probe why
the entities were heading south instead of north as expected. The reasons
must be all too clear.
Zanu PF’s populist policies over the years from independence were never
going to be consistent with running them as businesses.
It is even surprising that government has been sinking billions into these
corporations with the full knowledge that they were not performing. It
sounds hypocritical that Mugabe, who superintended over their gradual
collapse would now want to announce a decision he was supposed to have
actioned decades ago.
Calls for government to stop ploughing resources into State-owned
corporations that were not making a profit were frequent and loud for
anyone who cared to listen.
Mugabe may not have wanted to listen then probably because it did not
appear consistent with his political gamesmanship.
But again, Zimbabweans are not that docile as to applaud a decision that
is coming this late when the harm has already been done. Some of these
parastatals are already beyond redemption and the few that appear
operational are doing so at a huge loss.
What makes Mugabe’s sincerity doubtful is the thumbs-up he had given the
failed Essar deal, including the $1 billion from Chinese investor Zhang
Li’s R&F – touted as saviour to Ziscosteel, the recent $400 million
NRZ-Transnet Diaspora Infrastructure Development Group recapitalisation
project among others whose fate is fairly predictable. To make matters
worse, taxpayers are today coughing up money towards the RBZ Debt
Assumption Bill – railroaded through Parliament a couple of years back
without disclosing the names of the beneficiaries.