HomeBusiness DigestGovt decision on privatisation hurts indigenisation- Zembe

Govt decision on privatisation hurts indigenisation- Zembe

Shakeman Mugari

ZIMBABWE National Chamber of Commerce (ZNCC) president Luxon Zembe has criticised government’s decision to stop the privatisation of the country’s troubled parastatals.

“We want government to bring back privatisation,” he said. “Stopping privatisation is a deliberate effort to scuttle the indigenisation programme which had gathered momentum.

“Government must let Zimbabweans in their individual and collective capacity run businesses. They should let indigenous people go ahead and invest in parastatals through privatisation. Let the people run the economy.”

In an interview with businessdigest Zembe said government should desist from trying to run the ailing parastatals and privatise them to increase efficiency.

“Government should have minimal involvement in the business sector,” said Zembe. “They should not take an active role in the business. Government should act as a referee or a supervisor instead of being an active participant.”

He said government should create the framework and regulations and leave business to businessmen.

The ZNCC head expressed dismay at what he called government’s backtracking on the privatisation process.

He cited the examples of the recent decision by government to allow the Grain Marketing Board (GMB) to go into grain milling.

“Government must not allow GMB to venture into the milling business. What will then be the role of the millers? GMB should be a grain regulatory board, not a miller,” said Zembe.

“In the short-term it might work but in the long-run, history has shown that it is a disaster. The world over the indications are that government is really not good at running a vibrant business. Everyone has a role.”

Government has since had a policy shift on the privatisation issue and are pursuing commercialisation as an alternative.

The privatisation programme is no longer a key issue on the State’s agenda.

During the ZNCC congress late last year the Minister of Industry and International Trade Samuel Mumbengegwi said privatisation had fallen out of favour with government.

“Government is already a major player in the indigenisation programme and it has been considered not necessary to privatise such companies,” said Mumbengegwi.

On hold is the privatisation of Zisco, Air Zimbabwe, Finhold, Industrial Development Corporation (IDC) and the technically insolvent National Railways of Zimbabwe (NRZ).

Zembe said such a situation was disturbing and counter-productive.

He said the government must speed up the privatisation.

“They (government) must not be involved at management levels. Yes, they can own shares but not a controlling stake,” he said. “Experience has shown that governments are not capable of running business efficiently.”

Companies such as Zisco, NRZ and Air Zimbabwe have continued to feed from the taxpayer’s pocket.

Over the years government has extended financial support to parastatals after they fall into financial crises.

Despite the thrifty packages the companies have continued to operate below capacity with some even failing to provide the services required of them.

Most are heavily in debt and continue to borrow on the security that the state will bail them out in the event of serious financial constraints.

Government has since directed the Privatisation Agency of Zimbabwe to put on hold the privatisation process.

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