Revamping ailing SOEs gets top priority from Cabinet

Source: Revamping ailing SOEs gets top priority from Cabinet | Herald (Business)

Minister Mutsvangwa

Golden Sibanda

THE Government has deliberated extensively on ways to enhance the performance of State Owned Enterprises (SOEs) and a decision has been taken to establish an inter-ministerial committee to consider the matter.

This was revealed by Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa while briefing journalists during the weekly post-Cabinet briefing in Harare on Tuesday.

Notably, the Auditor-General’s 2017 report established that about 70 percent of state enterprises were technically insolvent after they incurred a combined US$270 million loss for the financial year ended 2016.

Minister Mutsvangwa said the deliberations covered a wide range of issues, as the Government seeks to drive the performance of State entities, key economic enablers, which have been a drag on the economy.

She said the inter-ministerial committee will “consider the matter further and proffer concrete recommendations that take into consideration the structure, performance, accountability, and governance of state enterprises.”

The interventions are part of Government’s reform agenda executed under the Transitional Stabilisation Programme (TSP) (2018-2020) to mobilise private sector capital, technology and expertise to enhance efficiency and performance of State entities.

A total of 43 parastatals and State enterprises have been identified for privatisation, restructuring or dissolution under the new dispensation’s reform agenda, with significant progress having been made thus far.

Zimbabwe has 107 State-owned enterprises and parastatals, which used to contribute 40 percent to the economy, but poor management, corruption and weak governance systems have seen them run down with contribution to the economy plummeting to an estimated 2 percent.

In 2016 alone, about 38 of these firms ran cumulative losses of US$270 million, indicating poor management, weak corporate governance and deep-seated corruption in the public enterprises.

And as part of government’s economic reform agenda, Finance Minister Mthuli Ncube announced a restructuring exercise for up to 47 state enterprises and parastatals in 2018 arguing it would improve efficiencies and reduce reliance on Treasury.

According to Ncube’s plan, some of them will be partially privatised through the engagement of strategic partners and/or listing on the Zimbabwe Stock Exchange, while others will be merged, fully privatised and/or even liquidated.

Minister Ncube said the agenda of the reforms was not privatisation, but State enterprise reform. He said the programme was a ‘marathon’ and not an event and that Government will take its time.

COMMENTS

WORDPRESS: 1
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    mukanya 3 weeks ago

    Mismanagement and corruption by the ruling elites are the major factors!