Time to curb rot in parastatals 

Source: Time to curb rot in parastatals | The Herald December 10, 2019

Benjamin Chivandire Correspondent
Lavish lifestyles, driving the latest executive vehicles, self-enrichment, unauthorised salaries and perks at the expense of Government is a salient feature of our present-day parastatal bosses.

Despite Government efforts to revitalise these entities by fostering a private-based economy, they are just in the business of paying salaries, and some executives at the entities routinely flout procurement regulations to enrich themselves.

On the other hand, the media is awash with endless reports of rampant corruption and maladministration in State-owned entities, but nothing much has been done to curb such malpractices.

However, the recent decision by the Government to fire lazy parastatal bosses in line with the Public Entities Corporate Governance Act beginning next year, is highly commendable.

This is so because most of these companies require subsidies, but due to poor performance, they have become a financial risk.
At their peak, SEPs contributed 40 percent of the country’s GDP in the 1990s, but that contribution has gone down to less than 10 percent owing to a myriad of challenges, mainly poor corporate governance.

This is clear evidence that the looting of State-owned enterprises has reached epic proportions and now poses a danger to national survival.

A closer look at the 2019 Auditor-General’s report reveals that lack of due diligence when procuring goods and services resulted in cases of some payments being made without subsequent delivery.

Notable cases, included the famous Zimbabwe Electricity Transmission and Distribution Company (ZETDC), which has not taken delivery of transformers nine years after making a payment of US$4,9 million to Pito Investments.

The same contractor was paid in advance an amount of US$561 935 by the Zimbabwe Power Company (ZPC) in 2016 and has not delivered.

In addition, ZPC also paid $196 064 in 2016 to York International for gas that has not been received.
The Grain Marketing Board (GMB) made an advance payment for maize worth $1 014 163 in 2016, and to date this has not been delivered.

Accountability issues continued to affect Air Zimbabwe (Private) Limited.
The company, according to the Auditor-General’s report, could not provide supporting documentation for operating expenses amounting to $13 705 014, and petty cash expenditure amounting to $654 587.

The airline also had an unexplained suspense balance of $27 965 576.
The company has not accounted for all aircraft.
There were unsupported payable balances of at least $26 million and unexplained variances of $87 million from amounts confirmed by suppliers.

No minutes of board and management meetings were available for the period under review.
Cash withdrawals amounting to $173 162 could not be traced to the books of accounts.
The rampant financial malfeasance in parastatals is evident of their tragic failure to manage public funds.

Hundreds of millions of dollars are looted with impunity. Virtually every State-owned enterprise is tainted.
The recent wave of corruption scandals, poor performance, abuse of national resources and poor service delivery from most parastatals support the call for parastatal reform and transformation, as the nation seeks to achieve Vision 2030 developmental milestones. It is high time the Government takes an aggressive and unwavering position in transforming parastatals, and implement robust turnaround strategies to ensure that they do not continue to make perennial losses on State resources that could ideally be used to support social services and development programmes.

Poor performance and underdevelopment in these sectors are dialectically related in that there has been a coterie of capitalists and petty bourgeoisie’s accumulation of wealth through unethical means, essentially, results in the impoverishment of the nation as a whole.

Their quest for fancy lifestyles can be supported by (Jabbra and Jabbra 1983:133) who regard it as “a very poorly developed conscience, for which personal profit and private loyalty take precedence over public duty”.

The new dispensation ushered in by the Second Republic requires parastatals to play a pivotal role towards the realisation of Vision 2030’s aspiration of an upper-middle income economy and empowered society.
They have a crucial role to play towards the attainment of goals set out in Vision 2030.

The vision can, therefore, not be attained if these entities do not play their part as enablers of economic growth.
It is, therefore, important that good corporate governance is instilled in parastatals to ensure that good governance systems are put in place for the good of the country.

Benjamin Chivandire is a Political Science student at the University of Zimbabwe. He can be contacted on benjaminchivandire@gmail.com