BULAWAYO — Government will soon gazette parastatals earmarked for privatisation amid expectations that it is finally moving away from previous rhetoric. The privatisation of loss-making parastatals is one of the major priorities of the inclusive government as it seeks to revive an economy battered by almost a decade of retrogressive policies.

Some of the struggling state companies that have been earmarked for whole sale privatisation are the Zimbabwe Iron and Steel Company (Zisco), Agricultural and Rural Development Authority (Arda), Cold Storage Company (CSC) and Air Zimbabwe.

Industry and Commerce minister, Welshman Ncube said the ministerial committee that was tasked with reviewing the state of the companies had prepared a report setting the privatisation framework that will be tabled in cabinet anytime soon.

“The question at hand is that of the government privatising those parastatals that belong to the private sector,” Ncube said in an interview on Friday.

“This is aimed at making sure that government retains its role of providing policy framework.

“A cabinet committee on this has completed its work to categorize parastatals into their respective groups.”

He said the government companies had been classified into three groups, which determine whether they would be commercialised, restructured or sold outright.

Added Ncube: “Once cabinet has accepted our recommendations as a committee, the privatisation agenda would move ahead and this time around, it will have more steam. This whole process will, in a way, help the government to raise some money for its business.

“Also, it will stop the draining of public funds to support the parastatals that are not making money under government supervision.”

The majority of parastatals are not able to generate enough money to sustain their operations and always look to government for cash handouts.

Several foreign investors have expressed an interest in Zisco but there are fears they would be discouraged by the recently passed Indigenisation and Economic Empowerment (General) Regulations: 2010

The regulations that seek to operationalise the Indigenisation and Empowerment Act crafted by the previous Zanu PF administration stipulate foreign owned firms must cede 51% of their shareholding to locals.

Meanwhile, plans to restructure Zimbabwe’s parastatals have gathered pace amid revelations that the struggling entities have the potential to contribute around 40 percent of the Gross Domestic Product (GDP).

Nearly all the parastatals which could be the engines for economic growth, have over the past years not only declined in terms of financial performance but have also gained notoriety for poor service delivery.

Topping the list of these notorious entities is ZESA Holdings which has shown no mercy when disconnecting power to consumers saddled with huge bills each month.

Some of the bills for people in the dark for the whole month, have reached the US$800 mark.

Determined to find a solution to these problems, board members and heads of parastatals met in Harare last week to strategise on how they could turn around the perennial loss makers.

Vice-President John Nkomo, who officiated at the event, stressed the need to revamp the State Enterprises and Parastatals (SEPs) in order to spur an economic turnaround.

He said the parastatals that survive on handouts from the fiscus, have been choked by poor corporate governance and lack of a well-defined performance monitoring mechanism, among other things.

“It is against this background that the Ministry of State Enterprises and Parastatals is playing a very crucial role in addressing the issues of corporate governance inadequacies within SEPs,” he said.

“To this effect, I am pleased to advise you that a draft Corporate Governance Framework is now in place and would be operationalised in the last quarter of the year.”

The framework seeks to force boards and the managers to adhere to good governance practices in their respective organisations.

Joel Gabbuza, the Minister of State Enterprises and Parastatals said lack of the framework “created a huge gap that left the control and administration of these entities subjected to individual and personal preferences at the expense of broad socio-economic objectives.”

BY NKULULEKO SIBANDA

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