Parastatal rot a creation of ZANU-PF: Moyo

via Parastatal rot a creation of ZANU-PF — Moyo | The Financial Gazette by Maggie Mzumara 6 Mar 2014

AS the salary gate scandal unfolds, the Movement for Democratic Change (MDC-T) alleges that corruption, as well as other vices are part of ZANU-PF’s DNA. To ascertain what role the MDC-T played or did not play in enabling or disabling the State-owned-enterprises with the rot, the Financial Gazette News Editor Maggie Mzumara (MM) spoke to the party’s Gorden Moyo (GM), former minister of parastatals and enterprises from 2009 to 2013.

MM: When you moved in to assume the role of minister for parastatals and state enterprises what did you find?
GM: When I assumed that position one of the things that I did was to ascertain the state of the parastatals and state enterprises and determine how they could become viable operationally. I found there were five distinct problems. One: Debt overhang. Most of them were caught up in the web of odious debt. There was debt between the parastatals themselves and also even international debt. Two: They had no credit lines open to them because of their inability to pay off debts. This resulted these entities having no working capital. Three: There was outdated and outmoded equipment. Totally dilapidated. Four: Mismanagement by managers together with boards. I found that there was incredible asset stripping — some for personal use and also for use by the party — ZANU-PF. You see, over the years ZANU-PF has been abusing the parastatals. We also found that these entities were heavily militarised — former army people were managing these entities. Five: Problem of human skills flight because of the economic situation in the country.

MM: Confronted with that, what did you seek to do and how far did you go, if anywhere?
GM: What did we do? We came up with a corporate governance framework which was approved by government and launched by the three principals: Morgan Tsvangirai (MDC-T), (President Robert) Mugabe (ZANU-PF), and Arthur Mutambara (MDC) at the Rainbow Towers. We made specific recommendations that boards needed to be restructured and or re-instituted; that board appointments should be based on experience, skills and capacity, not on party lines, not on nepotistic lines and not on family lines. We also said that no one should be on more than two parastatal boards, and we specifically said no permanent secretaries or ministry directors should sit on the boards because they are also government workers so they cannot sit above their peers. We also pointed out that salaries of managements and allowances for board members were too high. Most specifically we said no salaries should be given without the approval of line ministers. We were very clear about that. We carried out a study of chief executives of parastatals, state enterprises, those in the private sector, in local government, in the informal sector and we also compared with parastatals from the region and out of our results we came up a with a formula to determine salaries for chief executives of parastatals and state enterprises. The formula had four factors: Affordability – can the entity afford it; Comparability – how does the salary compare with private sector and other parastatals in the region; Sustainability — can the salaries be sustained; Reasonability —are the salaries reasonable given the state of the economy?

MM: In figures, what range did your recommended salaries translate to?
GM: We had found that salaries had been averaging around US$20 000, we recommended that they be reduced from that to US$3 000 to US$5 000 depending on one’s performance. And Cabinet accepted this.

MM: If Cabinet accepted, how come we have the salarygate scandals?
GM: The implementation of our recommendations was not the prerogative of my ministry but the various line ministries the parastatals and state enterprises fall under. The line ministries were directed by government and they acted as if they were complying, but it was a lie. In fact the salaries we recommended should be reduced were actually increased. When printing salary schedules to us they would give us low salaries which in fact were not a true reflection. Even to the auditor general and comptroller’s office they gave lower salaries than they were earning. The ministers were partners in crime. Some of the ministers are guilty. They were complicit in these salaries. One critical aspect which killed the drive to reform these enterprises was the scuttling of the State Enteprises and Parastatals Management Bill which we proposed.

It sailed through the processes but when it went to the Attorney General’s Office for drafting it died there. We would follow up through Patrick Chinamasa who was then Justice Minister but he would say we need the AG’s Office to draft but yet nothing came out of that. They were afraid that the bill would give the ministers powers to investigate. But you see, one critical thing was that because this issue was being pushed by an MDC-T minister they did not want to comply. For your information, the ministry of parastatals and state enterprises was dismantled because they did not want anyone to have oversight of what was going on.