PARASTATALS such as Zisco continue to reap billion-dollar losses because they are used to operating as social institutions that need to be constantly bailed out by govern
ment, claims Industry and International Trade minister Samuel Mumbengegwi.
The minister was responding to questions on the performance of parastatals at the post-budget breakfast meeting last Friday.
The country’s parastatals continue to make huge losses and borrow regularly from government.
The post-budget event, attended by the business community, labour and government officials, was meant to scrutinise Finance minister Herbert Murerwa’s $7,75 trillion 2004 budget.
“While these are extremely difficult times parastatals must not think that they should always go to government for resources each time they need them,” Mumbengegwe said.
“Look at Zisco. They forget that while government is the major shareholder they are a public company with shareholders. They must operate like any other company and go to their shareholders when they are in trouble.”
He said when government recently effected a management shake-up at Zisco things changed dramatically.
“Since September the company has been realising foreign currency which it is using to pay its own bills,” he said. “The bosses there should just realise that they must operate viably like any other company.”
Zisco continues to make million-dollar losses and, since the 1990s, has blamed its failure to export its product to the breakdown of “Blast Furnace Number 4”.
The Chinese have gone in and out of Zisco and regular promises made that the financially-beleaguered concern was now back on track.
In his budget statement Murerwa said public enterprises were being directed to charge economic and viable prices so as to ensure their financial independence from the national budget.
He said their borrowings from the market would be on the strength of their balance sheets with limited recourse to government guarantees.
The minister said large quasi-fiscal requirements, mostly financed from bank sources, had immensely contributed to the prevailing runaway inflation.
He said the cumulative impact of these operations over the years had resulted in an unsustainable borrowing requirement in excess of $150 billion.
“Beginning in the 2004 budget government will narrow and ultimately avoid such unbudgeted quasi-fiscal operations,” Murerwa said. “The Reserve Bank of Zimbabwe is now authorised to dishonour all such payment requests and obligations outside the budget framework.”
Zimbabwe’s ambassador to China Christopher Mutsvangwa was in Zimbabwe last week to promote trade and investment between the two countries. He said the Chinese had so far shown a keen interest in helping solve Zisco’s perennial crisis.