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Parastatals must perform — Mugabe

PRESIDENT Robert Mugabe yesterday said government is now tired of rescuing underperforming state enterprises and parastatals (SEPs), adding it is time they  became self-sufficient. 

He said most SEPs were performing dismally necessitating government intervention yearly. Mugabe made the remarks at the official launch of the Corporate Governance Framework (CGF) for State Enterprises and Parastatals.

The launch was also attended by Prime Minister Morgan Tsvangirai and Deputy Prime Minister Arthur Mutambara.

Mugabe said: “We have the story (of SEPs) of deficits, deficits and deficits, failure, failure and failure, loss, loss and loss and appeals to government to salvage situations.

“In some situations government would not be able to salvage you (SEPs) and in most cases government has come with assistance. It has come with some help but that cannot be expected. So we say let us inject into ourselves that discipline.”

Some of the government state enterprises and parastatals that have been under intense public scrutiny for performing dismally are Ziscosteel, Cold Storage Company, Noczim, Telone, National Railways of Zimbabwe (NRZ), Zesa Holdings, Air Zimbabwe, Grain Marketing Board, Netone and Agribank.

The framework signed by the three GPA principals hopes to bring sanity in most SEPs by providing guidelines to transparency, accountability, efficiency, risk management and effectiveness.

Mugabe said: “It is common knowledge that most state enterprises and parastatals have not met the standards expected of them in delivering service. This is attributed to various reasons, the most important being weak corporate governance as well as poor ethical practice guidelines.

“The unfavourable co-operational environment that characterised our economy owing mainly to illegal sanctions imposed by some Western countries severely contributed to the poor performance of the SEPs at a great cost to the nation.”

Mugabe expressed disappointment at the continued inconsistencies that “dogged” the SEPs. He said the adoption of the CGF was fundamental and timely and made it essential for company officers, directors and senior managers to understand their responsibilities and legal obligations that are cognisant of the changing socio-economic environment.

 

Mugabe said failure for the SEPs to adhere to the stipulated guidelines in the CGF was punishable and hoped the adoption of the framework would reduce dependence on the fiscus and enhance their contribution to economic turnaround.

Tsvangirai said the main issue that the government had to deal with was the conflict between the Ministry of State Enterprises and Parastatals and line ministries.

“If we are able to define the key roles of this ministry setting out standards of how parastatals work and there is no conflict in that ministry we would have achieved a lot. There are some state enterprises and parastatals that need to be rationalised and others that need to be nationalised,” he said.

Mutambara was of the view that SEPs have the potential to contribute about 40% to the GDP but were compromised by “role ambiguity, ineffective boards, ineffective management systems and non adherence to statutes which has contributed to poor performance by some SEPs rendering them a drain on the fiscus”.

 

Wongai Zhangazha

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