Parastatals urged to up GDP contribution 

Source: Parastatals urged to up GDP contribution | The Herald

Parastatals urged to up GDP contribution
Mr Manungo

Leonard Ncube Victoria Falls Reporter

The Government is concerned about poor performance of some State entities and parastatals whose contribution to the Gross Domestic Product (GDP) has plummeted to less than 10 percent from around 40 percent in the 1990s.

This calls for refocusing as their performance is key to realisation of national development goals.

Speaking at an induction workshop for the Broadcasting Authority of Zimbabwe (BAZ) board members here yesterday, Permanent Secretary in the Office of the President and Cabinet, responsible for State Enterprises Reform, Corporate Governance Unit and Procurement Mr Willard Manungo said President Mnangagwa identified performance of public entities as an area that requires refocus for the country to realise national aspirations and Vision 2030.

“The performance of the public entities historically in the mid-1990s used to contribute around 40 percent of the country’s Gross Domestic Product, but on the latest statistics they are contributing under 10 percent in terms of overall economic performance,” he said.

“There are various factors that account for decline in the contribution of public entities to the GDP and ourselves in the Corporate Governance Unit in the Office of the President and Cabinet have identified issues around accountability and transparency which take centre stage with regards to some of the poor performance we have been experiencing.”

Mr Manungo said public entities cover all the major sectors of the economy like agriculture, transport, financial services, mining, energy, water, information and manufacturing, which makes their performance critical to the realisation of the national aspirations.

Various Ministers and Permanent Secretaries signed performance contracts before President Mnangagwa recently.

Mr Manungo said this also transcended to chairpersons and chief executives of public entities to make sure those in charge are accountable for performance and delivery.

He said Government came up with the Public Entities Corporate Governance Act in June 2018 and Public Procurement and Disposal of Public Assets Act to hold public entities accountable.

“The other challenge include capitalisation and all these are being addressed as part of interventions that Government is making to try and capacitate the various public entities so that they are also able to perform,” said Mr Manungo.

“So, we will be seeing a lot of interventions that Government is making, but in doing that we want to hold everyone accountable.”

Mr Manungo said the major impact of poor or non-performance is poor service delivery which affects citizens who are the major shareholder by virtue of being the biggest consumers of services.

This, Mr Manungo said, leads to public outcry as citizens complain about poor services.

He said President Mnangagwa was emphasising on performance driven culture to reverse the shortcomings that citizens have been witnessing.

“We hope that by the end of the year we begin to see reversal in that decline and Treasury is ensuring that we go towards restoring performance towards 50 percent which is in excess of what the state entities used to make,” said Mr Manungo.

“Poor performance of public entities makes it difficult for other sectors like private and small to medium enterprises to contribute meaningfully.”

Information, Publicity and Broadcasting Services Deputy Minister Kindness Paradza, who was the guest of honour, said if well managed, State enterprises can contribute more significantly.

He said the era of directors and managers in State enterprises and parastatals living large while entities provide poor service to consumers is over, as all public entities must ensure a 70 percent service delivery and 30 percent salaries ratio.

“In the past we have noted that those in senior management rewarded themselves with huge salaries and other perks approved by the board when delivery is poor and this should be a thing of the past,” said Deputy Minister Paradza.

“Under President Mnangagwa’s administration, looting of public institutions must never be condoned. Ineffective boards and lack of commitment by members will surely result in poor performance and in the process draining the fiscus.

“This is a cause for concern for us both as policy makers and shareholders and Government efforts can only be accomplished through steady leadership and support of boards.”

With reference to BAZ, Deputy Minister Paradza said its new board which was set up two years ago is presiding over a strategic asset as freedom of expression and access to information is one of the top deliverables in the Second Republic.

“BAZ is very strategic in terms of national security and national development,” he said.

“BAZ must now focus on making sure that we develop the institution and we are saying we want results.

“Let me remind you that the entity you preside over is very strategic both in terms of national security and our sustainable development goals.”

Government expects BAZ to grow the broadcast media and provide criteria for licensing among several expectations.