Gono unconvincing on NEDPP gains

RESERVE Bank of Zimbabwe governor Gideon Gono was last week forced to make a retreat on claims that government had raised US$2,5 billion in foreign currency, a target it set for itself at the launch of the National Economic Development Priority Programme (NEDP

P) in April.


Gono told a Confederation of Zimbabwe Industries congress in Bulawayo that government had met its target to raise US$2,5 billion in three months from April.


But when challenged by delegates to provide the figures, Gono allegedly said the US$2,5 billion was not in cash only, but included other investments.


“The target to generate US$2,5 billion has been met but the injection was not in cash alone but included other investments in the country. The target we set ourselves in April has been met,” Gono said.


The government launched the NEDPP in April this year aimed at reducing the rate of inflation and to stabilise the currency.


Under the NEDPP government also pledged food security and to generate US$2, 5 billion in foreign currency in three months. However, Gono could not give details of the new investments in the country.


Also at the same congress Finance minister Herbert Murerwa revealed that state enterprises made losses totalling $76 trillion in the first six months of the year, an indication that government had failed to turn around the fortunes of parastatals.


Murerwa said companies that recorded the heaviest losses in the period include the National Railways of Zimbabwe (NRZ), Hwange Colliery, Zimbabwe Electricity Supply Authority (Zesa) and the Zimbabwe Iron and Steel Company (Zisco).


“The restructuring of parastatals has been slow with most of them continuing to make losses. In the first six months of this year, they made losses of close to $76,43 trillion,” said Murerwa.


He said as a result the parastatals were failing to service their debts and were constantly calling on government for assistance.


“This high indebtedness remains a challenge for both the fiscus and the public service sector,” Murerwa said.


Despite under-performance by the parastatals, government has poured in billions of dollars for their capitalisation.


Murerwa however said the Zimbabwe United Passenger Company (Zupco), the Agricultural and Rural Development Authority (Arda) and Agribank had performed well to a point of declaring dividends to shareholders.


Murerwa attributed the poor performance of parastatals to poor corporate governance and government subsidies on prices.


The government two years ago set up a concessionary loan facility to lend parastatals money through the RBZ.


In 2004 the RBZ loaned $25 billion to Arda, $20 billion to the NRZ, $10 billion to Zupco, and $7,5 billion each to Air Zimbabwe and the Zimbabwe Broadcasting Holdings.


Presenting the 2006 budget last year in December, Murerwa said government would privatise seven parastatals in a bid to stop them from draining the fiscus. There is no evidence of that on the ground. — Staff Writer.