Government urged to commercialise all state enterprises

31 Jan, 2018 - 13:01 0 Views
Government urged to commercialise all state enterprises Professor Ashok  Chakravati

eBusiness Weekly

HARARE –The Zimbabwe government must take a bold step and commercialise all state enterprises and restrict itself to providing an enabling environment for business to prosper, an economist said on Tuesday.

The government recently said it was in the process of rationalizing its over 90 state enterprises and was targeting to have some privatised while keeping those it deemed strategic under its control.

Ministries that have state enterprises under them have been asked to  produce turnaround programmes for them.

The government linked and owned businesses have been criticized for  their poor service delivery and are riddled with corruption due to  poor corporate governance that has seen most failing to break even and  depending on bailouts from a cash strapped Treasury to remain in  operation.

Investors have however been invited to indicate their interests in some  of the parastatals and state owned enterprises for the offers to  be considered.

But government adviser and economic commentator, Professor Ashok  Chakravati told delegates at a Confederation of Zimbabwe Industries (CZI) economic outlook symposium that the government should let go of  all state enterprises.

“Outright commercialization and joint ventures is the answer not this  restructuring of parastatals” he said.

Chakravati said companies under the government owned Industrial  Development Corporation (IDC) must all be sold and the funds used to  incubate other companies. The IDC owns over 20 companies in different sectors of the economy.

“The state must not be involved in production but must create a  conducive environment for business to prosper,” said Chakravati. Producing turn around strategies for the parastatals was not the answer  to addressing the issue of problematic government owned  businesses, he said.

Economist James Wadi, who was non-committal on what exactly the  government should do, said the parastatals would only make a positive  contribution to the economy and government coffers if they were run  properly.

“What is problematic about our enterprises is the way they have been  run. If they are profitable, they would have contributed to government  revenue,” he said.

In its defence, the government has argued that parastatals, like the  power utility, Zesa Holdings, should not be privatised since they  provided critical services that should at all times be kept in check to  ensure that they remained affordable to the general citizenry. – New Ziana

Share This:

Sponsored Links