State-owned enterprises keep turnaround deadline

06 Apr, 2018 - 06:04 0 Views
State-owned enterprises keep turnaround deadline Dr Ndhlukula

eBusiness Weekly

Business Writer
State Owned Enterprises and Parastatals have complied with Government’s March 31, 2018 deadline to submit their re-organisation and turnaround plans.

Government, through various line ministries, last year began evaluating SOEs under their purview as part of an exercise to identify entities that will be retained or disposed.

The initiative falls under the 100-day initiative set by President Emmerson Mnangagwa.

Office of the President and Cabinet deputy chief secretary Dr Ray Ndhlukula told the Business Weekly that the response from SOEs in submitting their re-organisation and turnaround strategies has been overwhelming.

He said the issue of state enterprise reform is still under discussion, while a comprehensive report is expected to be presented before Cabinet next week.

“The issue of re-organisation of SOEs is still under discussion and the response from them has been overwhelming in response to the March 31 deadline.

“It has been an encouraging process and a comprehensive report will be presented in Cabinet next week,” said Dr Ndhlukula.

ZESA Holdings yesterday confirmed that it is one of the SOEs which has submitted its re-organisation plans while other entities like the Civil Aviation Authority of Zimbabwe, Zimbabwe National Road Administration Authority among many others are said to have also complied.

Under the directive, line ministries were to come up with comprehensive and exhaustive information of how the SOEs have been faring, including recommendations on the way forward.

In his 2018 National Budget presentation, Finance and Economic Development Minister Patrick Chinamasa said parastatals, which exhibited potential “will be reformed, while those which cannot be rehabilitated will be privatised or face outright closure.”

“Our public enterprises remain a drawback through their inefficiencies, with their contribution to the economy down from around 60 percent to current levels of about 2 percent,” added Minister Chinamasa.

“Their inefficient operations are a drain on the budget, over and above serving to worsen the high cost of doing business in the economy.

“Despite the under-performance of these entities, management at most parastatals continues to enjoy huge salaries and benefits, which breach Cabinet’s directive of packages not to exceed 30 percent of total revenues.”

The 2016 financial audits show that 38 out of 93 parastatals incurred a cumulative loss of $270 million due to weak corporate governance practices and ineffective control mechanisms.

Currently, a few state enterprises, namely Agribank, TelOne, NetOne, the National Oil Company of Zimbabwe (NOIC) and the National Social Security Authority (NSSA) have been performing fairly well and have been consistent in publishing their audited results.

Some entities such as Zupco, Air Zimbabwe and Zesa are still struggling and dependent on Government support.

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