Performance-based contracts for parastatals, State enterprises 

Source: Performance-based contracts for parastatals, State enterprises | The Herald

Performance-based contracts for parastatals, State enterprises
Dr Sibanda

Walter Nyamukondiwa

Kariba Bureau

THE Government is focusing on the underperformance of parastatals and State enterprises through ongoing reforms, warning that good corporate governance mechanisms, including performance contracts for accounting officers, are ready and will come into effect in 2021.

This is expected to prime State enterprises and parastatals to contribute towards national development as was the case in previous years when they contributed more than 40 percent to the country’s Gross Domestic Product (GDP).

State enterprises and parastatals are expected to play a key role in the realisation of the National Development Strategy (NDS) which will drive the country’s development towards Vision 2030.

There has been notable lack of conformity to good corporate governance attributed to lack of clearly defined roles among players including ministers, chairpersons of company boards, permanent secretaries and chief executive officers.

To remedy that, Government has come up with the Public Entities Corporate Governance (PECG) Act which is expected to ensure that State enterprises and parastatals are transformed into profitable entities.

In his address at the dissemination workshop for Implementation Manuals of the Public Entities Corporate Governance Act for Permanent Secretaries here, Chief Secretary to the Office of the President and Cabinet Dr Misheck Sibanda warned that it was no longer business as usual for State enterprises’ leadership and line ministries.

“It is not a secret that the poor performance of our State enterprises and parastatals sector has had a significant negative impact on the country’s efforts towards attaining sustainable rapid economic growth and development,” said Dr Sibanda.

“I need to emphasise that it is important that ministries and board of directors of State enterprises and parastatals always comply with provisions on transparency, accountability and disclosure.”

Dr Sibanda said there was need for clearly defined roles for key players including ministers, chairpersons of board of directors, permanent secretaries and CEOs.

He said countries such as China and Zambia had undertaken reforms of parastatals and State enterprises.

Dr Sibanda said with a cocktail of measures, including President Mnangagwa’s hard stance on corruption and curtailing of wasteful expenditure in Government, the New Dispensation meant business.

He said it will not be business as usual for accounting officers in Government and State enterprises and parastatals.

Government hopes that by rolling out the Public Enterprises Corporate Governance Act through training of stakeholders and spreading of information after the review of the State Enterprises and Parastatals Ownership Model by Cabinet recently, the entities would optimally contribute to the success of NDS1 and 2 and the subsequent achievement of Vision 2030.

“Specifically, the thrust is on the reform, reconfiguration and reorientation of the SEPs sector, including implementation of the reviewed country’s SEPs Ownership Model,” said Dr Sibanda.

“In this regard, the objective is to fundamentally turnaround the management, oversight and governance of the SEPs sector for its effective contribution to the socio-economic discourse of the economy.”

The Department of State Enterprises has conducted a series of trainings and workshops to capacitate heads of ministries and senior officials at State enterprises through the Implementation Manuals for the Public Entities Corporate Governance Act.

“The success of these workshops should manifest itself through clearly visible culture change in the sector with regards to adherence to good corporate governance practices and improved service of the citizenry,” said Dr Sibanda.

Permanent secretaries have been implored to ensure that the Public Enterprises Corporate Governance Act is implemented to ensure that SEP operate profitably.

To inculcate a results oriented culture and high performance, contracts for permanent secretaries for 2021 have been developed during the strategic planning process.

President Mnangagwa has moved to strengthen the Centre for Good Governance to ensure accountability within the public sector by endorsing a body comprising the Office of the President and Cabinet, Public Service Commission and Ministry of Finance and Economic Development.

“The Tripartite is charged with the responsibility of continuously providing policy direction and guidance as well as the requisite financial and human capital in the implementation of the transformative National Development Strategy 1 towards realisation of Vision 2030,” said Dr Sibanda.

“This Tripartite Institutional Arrangement has, thus put in place performance contracts for heads of ministries as a tool to strongly monitor the entire Government machinery to achieve this feat.”

Reform and restructuring of State enterprises and parastatals, he said, was being pursued at the highest level with the hands-on involvement of the Presidency.