Parastatals bore a hole through state coffers

Ray Matikinye

ON almost every occasion President Robert Mugabe has opened a new session of parliament he has, with predictable monotony, announced the creation of another quasi-governmental organisation (QGO).

Now there is a parasta

tal for almost every facet of life, be it water, agriculture, tourism, or aviation. Alongside these comes a bureaucracy to manage the institution.

Creating authorities and similar parastatals has become a predilection of the ruling elite, often accused of trying to ensure close associates climb aboard the gravy train which these QGOs offer without adding value to national corporate governance or service delivery.

Representatives of parastatals recently told Vice-President Joice Mujuru at a workshop that public companies were not producing positive results because nepotism played a major role in the appointment of chief executives and board members.

The pet habit of creating parastatal bodies has invariably weighed down heavily on the government’s claimed desire to improve efficiency. Among the ruling elite’s cronies appointed to head these quasi-governmental organisations many often lack managerial skills and are of the pedigree that misconstrue their role and believe national assets are there for them to plunder.

Since Independence in 1980, Zimbabweans have watched in astonishment as top-shelf parastatals have gradually degenerated into a pale shadow of their former status. They have also watched new parastatals come on stream, courtesy of a command economy philosophy in which the state has to have a finger in every pie.

Middle-aged Zimbabweans remember the efficient transport service provided by the Harare and Bulawayo Omnibus Company which ensured workers got to work on time.

Such efficiency ensured that man- hours that could be lost in industry and commerce were reduced to a minimum, unlike now when employers no longer question workers why they are late for duty.

Under its successor, the Zimbabwe United Passenger Company, the urban and ordinary commuter encounter nightmarish experiences each working day. Despite government pouring in huge amounts of money, Zupco has failed to justify the state’s largesse.

For instance, a recent audit report revealed gross managerial ineptitude that has hobbled the public transport provider under its former boss, Bright Matonga, now the deputy Minister of Information and Publicity.

Zupco made crippling losses during Matonga’s reign. It recorded a $9,6 billion loss in 2002, $9,7 billion in 2003 and $19,3 billion in 2004. The losses were made at a time when Zupco had increased its fleet for both rural and urban commuters. Transport companies usually make profits when the fleet is still new as operating costs are low, the reports say.

The reports, compiled by Kudenga & Co Chartered accountants for the period 2002 and 2004, reveal that about six accounts with different banks were not recorded in Zupco’s books and no bank reconciliations were prepared for these accounts. These accounts, as evidence shows, could have been used to siphon billions of dollars from the company. The accounts could have been used to “embezzle” funds, says one of the documents.

The Zupco case is emblematic of most parastatals.

Numerous examples exist where failed bureaucrats have been let off the hook with light raps on the knuckles and even given the opportunity to preside over more demanding institutions.

That realisation could have prompted Mujuru to remark: “We should give someone a job according to their ability even in parastatals.”

A decade ago, a CEO appointed to turn around the lost-making steel-manufacturing giant Zisco, squandered public resources by concentrating his energies on installing costly hi-tech security gadgets on his and other senior managers’ residences.

Yet another parastatal chief and those in top managerial positions
fell over each other in a scramble to import tonnes of obsolete spare parts that were incompatible with a modern electricity generating plant.

With such a history of dereliction of duty among parastatal chiefs, it is little wonder government has become concerned about the way these institutions are run. That could have been Mujuru’s reasoning when she remarked: “Let me encourage you (parastatal heads) to undertake a very serious introspection and make up your minds whether you believe you are up to the job you have been given. If you have any doubts in your mind I will gratefully accept your resignation.”

She has also initiated a programme of mid-year reviews of the performance of parastatals that she intends to extend to annual reviews. A similar attempt by a former Finance minister earlier didn’t get far owing to lack of
political support. Stunned by the level of inefficiency and lack of accountability, the former minister threatened to introduce time-framed contracts based on performance appraisals.

That too had little road to run.

Neither do the current efforts by Reserve Bank governor Gideon Gono to nudge parastatals towards accountability and efficiency seem to yield tangible results.

State Enterprise minister Paul Mangwana could have meant well by saying parastatals should perform and be run on commercial lines instead of draining resources from government.

What the ordinary Zimbabwean would have loved to hear is how he will deal with corruption and mismanagement associated with these bodies that have become millstones around the nation’s neck.