Mumbengegwi’s confession of failure

THE announcement by I

ndustry and International Trade minister Samuel Mumbengegwi that government was abandoning its privatisation programme marks a serious departure from the reform measures government has been touting for a number of years.

While ministers have previously emphasised the need for successful commercialisation of public enterprises, this was always seen as a preliminary to ultimate divestment. But Mumbengegwi, it would seem, in keeping with the backward behaviour of the anti-reform wing of President Mugabe’s government, has closed the door to a vital component of economic recovery.

Speaking to the Zimbabwe National Chamber of Commerce in Bulawayo recently, he said NRZ, Air Zimbabwe and Zesa would not be privatised but commercialised.

These are companies that continue to drain the fiscus despite government assurances that they would be placed on a sound footing.

This paper revealed the shocking news last week that from 18 planes at Independence, Air Zimbabwe had been reduced to a fleet of three. NRZ is technically insolvent. Zisco is a disaster. In all these cases taxpayers pick up the tab for the state’s managerial incompetence.

Why is it assumed that a government that cannot manage its own budget can manage the budgets of public corporations where managers and workers are sheltered from best practice and keep their jobs irrespective of performance?

NRZ is unable to perform its basic function of moving goods and passengers. As a   result the operations of Wankie Colliery and Zisco are prejudiced. Goods which take less than a week to be shipped by rail from Durban to Bulawayo now take a further three weeks to be released from NRZ’s goods yard.

Tel*One behaves like a parastatal in responding to the needs of customers who have no alternative service provider to turn to because government has been slow to license the fixed-line service of even one of its own supporters.

Air Zimbabwe has been failing its passengers for several years now. An energetic campaign by government to bring tourists to the Victoria Falls will collapse in part because the national airline is incapable of providing a world-class service. Tourists will take SAA to the Zambian side instead. They resent being dumped at airports because of late arrivals or last-minute schedule changes.

Government cannot oppose privatisation of these poorly-performing companies on the grounds of a poor track record of divestment to date. Cottco, Dairibord, and Zimre all operate efficiently and profitably following their release from the clutches of state control. At the same time they have relieved the fiscus of the burden of subsidies and contributed in tax to national revenues. That in turn enables government to spend money on other things.

Commercialisation on the other hand has added to the burden of consumers. Blithely ignoring the price controls the private sector is subject to, state companies like Zesa, Tel*One, Zimpost and the CSC have hiked costs at regular intervals adding hugely to the vicious cycle of inflation.

The pretext for hanging on to these concerns is that indigenous Zimbabweans will benefit. It is difficult to see how indigenous Zimbabweans are benefiting from government ownership at Air Zimbabwe, Zisco, NRZ and Zimpost. There have been no benefits of technology transfer, capital injection, or new markets which privatisation would yield. Instead there has been a continued decline in which consumers are being fleeced.

Mumbengegwi’s claims that privatisation is at odds with indigenisation should be seen as the last hurrah of a regime wedded to outmoded and damaging economic policies, using the excuse of indigenous ownership to mask sheltered employment for its own parasitic elite.

Nothing more clearly illustrates the economic bankruptcy of this regime than its abandonment of a policy programme that has brought benefits to governments and ordinary people — many of whom become first-time shareholders — around the world.

Zimbabwe’s policies are not only at variance with best practice overseas, they are at odds with trends within the region.

Mumbengegwi has exposed Zanu PF’s incorrigible failure to learn from its mistakes and from the success of other societies. He has provided one more reason why this regime should not be allowed to punish its people any further.

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