GOVERNMENT is mulling to set up a stock exchange for state-owned enterprises and parastatals to raise fresh capital for their operations.
Report by Our Staff
State Enterprises and Parastatals minister, Gorden Moyo, told participants at the mining indaba last week the plan came after the realisation that state-owned enterprises and parastatals were not meeting the stringent requirements to join the Zimbabwe Stock Exchange (ZSE).
“The standards and guidelines are high (on ZSE). Our state-owned enterprises have been going through challenges in terms of capitalisation, there have been human capital flight and we have been exploring the idea of setting up equity exchange for state enterprises,” Moyo said.
One of the requirements for a company to list on ZSE is to provide a satisfactory profit history for the preceding three financial years.
This requirement is not feasible as most parastatals and state-owned entities have been recording losses and are behind in terms of producing audited financial results.
Moyo said a delegation from the ministry, led by his deputy, Walter Chidhakwa was currently in China to explore the Chinese model where they are listed on the stock exchange. State-owned enterprises and parastatals have been an albatross around the neck of the government.
They have also become the breeding ground for inefficiency where the “jobs for the boys” syndrome is prevalent. Corporate governance has also been alien with a number of state-owned entities operating without substantive boards, and failing to hold Annual General Meetings.
Grain procurer, Grain Marketing Board recently held its first AGM in 81 years.
A recent report by the Comptroller and Auditor General noted that some parastatals were operating with poorly constituted or without boards.