Moyo yesterday told delegates attending a convention on best practices in leading and managing “exceptional” state-owned enterprises and parastatals in South Africa that Zimbabwe’s recovery from the decade-long recession could be retarded by a host of problems affecting financially beleaguered government-owned companies.
“The combined effect of political and economic challenges had a severe impact on almost all State-Owned Enterprises (SOE) in the last decade and the consequences could be far more devastating for the country in future unless appropriate measures are put now,” Moyo said.
Zimbabwe’s parastatals continue to be saddled by a huge debt overhang that has resulted in serious deterioration of infrastructure due to limited maintenance.
Investors, according to Moyo, continue to shy away while working capital and external lines of credit are elusive.
“Our kingpin in turning around the fortunes of SOEs is adopting the global best practices, especially corporate governance,” he added.
The minister said government is at an “advanced stage” of formulating a Corporate Governance Framework for state enterprises and parastatals.
He said the new measures would, among other reforms, ensure more disclosure in parastatals and introduce performance-based management.
His remarks come after Finance minister Tendai Biti last month projected the economy to grow by a modest 5,4%, marking a downward revision from an initial projection of 7,7%. Biti said the projected growth would be driven by a rebound in the agricultural sector.
Meanwhile, the ZSE last month asked Indigenisation minister Saviour Kasukuwere to push for the privatisation of troubled parastatals in line with the empowerment regulations gazetted earlier this year.
The exchange argued that since independence in 1980, former parastatals, Dairy Marketing Board now ZSE-listed Dairibord and Cotton Marketing (now Cotco but trading on the exchange as Aicco) successfully turned around business fortunes after government weaned off the companies.
The ZSE is targeting parastatals that include power utility Zesa, the Grain Marketing Board, National Railways of Zimbabwe, unreliable public transporter Zupco, national carrier Air Zimbabwe, Zimbabwe Iron and Steel Company, Minerals Marketing Corporation of Zimbabwe and telecommunications companies NetOne and TelOne.
Government has already categorised public entities into three broad categories –– those to be commercialised, those to be privatised and those to be restructured although it remains tight-lipped on which enterprises would be affected.
Moyo however said his ministry would ensure “the end of ad hoc approaches to policies resulting in contradictions and counter production” to the lethargic privatisation process.