HomeBusiness DigestNo cheap funds for parastatals

No cheap funds for parastatals

Shakeman Mugari

MOST parastatals will not access the cheap productive sector funding offered by the Reserve Bank of Zimbabwe (RBZ) because they have not released externally audited accounts as required b

y the central bank.

The central bank last month said parastatals that wished to access productive sector funds at an interest rate of 50% should have audited results and a turnaround plan for the current fiscal year.

In the past government has dished out loans to beleaguered parastatals without audited accounts. The state has also guaranteed parastatal loans from private banks. Most of the state companies have failed to pay back the loans with some being blacklisted as bad debtors.

Even with government guaranteed loans the parastatals have gone on to incur shocking losses due to lack of accountability and corruption. There are 32 parastatals currently operational and none of them has produced up-to-date audited accounts for the last fiscal year to meet parliamentary and central bank requirements.

State companies are also required to submit audited accounts and annual reports to parliament through their respective ministries under the Audit and Exchequer Act (Chapter 22:03).

The Zimbabwe Broadcasting Corporation (ZBC), the debt-ridden Zimbabwe Electricity Supply Authority (Zesa) and the troubled Grain Marketing Board (GMB) are some of the state companies that will not receive central bank loans as they have not externally audited their accounts.

The three parastatals have not audited their books for the past three years. Most of the parastatals are heavily in debt.

Other major parastatals still to audit their books include the crumbling National Railways of Zimbabwe (NRZ), Agricultural and Rural Development Authority (Arda) and Air Zimbabwe.

As of October 2003 to April 30 only six parastatals had managed to release some reports – the bulk of which were grossly outdated.

The National Social Security Authority (NSSA) only managed to produce annual reports for 1998-2001 in January this year. The Industrial Development Corporation (IDC) last produced an annual report two years ago.

In his first monetary policy review, governor Gideon Gono offered loans to Air Zim ($7,5 billion), ZBC ($7,5 billion), Zesa ($30 billion) and Arda ($25 billion).

Wankie was offered a maximum of $15 billion while NRZ was offered $20 billion. This dispensation would only be available until July next year.

He said these funds would however be available only to companies that produce externally audited accounts and credible turnaround plans to rid themselves of the current debts.

Gono also threatened to expose the parastatals by publicising those companies that would have succeeded in accessing RBZ funds.

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