Sweeping changes to parastatals

Source: Sweeping changes to parastatals | The Sunday Mail November 11, 2018

Tichafara Bepe
Government has started restructuring 41 State-owned enterprises (SOEs) as it ups efforts to wean them from the fiscus and make them commercially viable.

Thirteen of the 41 SOEs will be privatised, while 12 will be listed on the Zimbabwe Stock Exchange. Other entities will be departmentalised, partially privatised, commercialised or liquidated.

The Infrastructure Development Bank of Zimbabwe, Zupco, Agribank and some Industrial Development Corporation subsidiaries will be privatised; while Petrotrade, Willowvale Motor Industries, Chemplex Corporation and Deven Engineering will be listed on the stock exchange. State Enterprises Reform Agency executive director Mr Edgar Nyoni told The Sunday Mail recently that, “Technical committees have been set to initiate the implementation of privatisation and engagement of strategic partners to help with the reforms.

“Requests for expressions of interest for transactional advisors for Agribank, Petrotrade, TelOne, POSB, Zimpost were flighted and evaluation of the expressions of interest is currently underway. Requests for Expressions of Interest for Zupco, NetOne and IDBZ will be flighted soon.

“The partial privatisation of the 17 Zimbabwe Mining Development Corporation subsidiaries is underway, and is being implemented in batches to make the transactions manageable.”

The Grain Marketing Board and Civil Aviation Authority of Zimbabwe will be unbundled so as to separate their regulatory and commercial functions.

Unbundling GMB is envisaged to improve its operational efficiency through preventing cross-subsidisation between the commercial and social operations of the business.

Added Mr Nyoni: “Such perceived cross-subsidisation made it difficult to predict the operational expenditures of the entity. Social operations had been receiving Government assistance from Treasury for Strategic Grain Reserve financing.

“The operations of the parastatal were seamless in terms of social operations and commercial operations. This raised perceptions that some of the Government funding earmarked for social operations ended up being used for commercial operations.

“On the other hand, there was also a perception that the funds generated from commercial operations were used to finance social operations.”

Organograms

Five State entities that will be adopted by their line ministries – New Ziana, the National Indigenisation and Economic Empowerment Board, the National Liquor Licensing Authority, the Board of Censors and the Lotteries and Gaming Board – are working with the Public Service Commission on operational structures.

“Once the processes are completed, the line Miniseries will then implement the recommended departmentalisation frameworks,” said Mr Nyoni.

New Ziana will be departmentalised under the Information, Media and Broadcasting Services Ministry; NIEEB under the Industry, Commerce and Enterprise Development Ministry; the National Liquor Licensing Authority under the Local Government, Public Works and National Housing Ministry; and the Board of Censors and Lotteries and Gaming Board under the Home Affairs and Cultural Heritage Ministry.

Mergers

Plans are underway to merge 13 SOEs into five entities to cut costs, improve efficiencies, and eliminate redundancies and duplication of duties.

The Postal Telecommunications Regulatory Authority of Zimbabwe will be merged with the Broadcasting Authority of Zimbabwe.

Other State entities that will be merged include Powertel, Zarnet and Africom (Internet service providers), the Boxing and Wrestling Boards, as well as the Competition and Tariffs Commission and the National Competitiveness Commission. The Zimbabwe Investment Authority, the Special Economic Zones Authority, Zimtrade and the Joint Venture Unit will be merged into a new entity – the Zimbabwe Investment Development Agency (ZIida).

“It was realised that money required for their bailout as standalone institutions were huge compared to instances when they are consolidated. Government, therefore, decided to consolidate such related entities and make previously standalone entities specialised windows or units operating under a single administration in terms of board and management,” explained Mr Nyoni.

National Glass Industries, tractor firm Motira, Zimglass and Kingstons Limited will be liquidated as Government has seen that there are private players already operating viably in their lines of business.

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