HomeOpinionRemedying parastatal deficiencies

Remedying parastatal deficiencies

MEDIA reports in recent weeks have cited numerous industrial, commercial and business authorities’ views on the many factors which have contributed to low levels of the economy in general, and of inadequate productivity in particular.

All of those media sources emphasised that most, if not all, of the economically debilitating causes, still prevail and are likely to endure into 2011, and many of them probably into years ahead.  Amongst the many hindrances confronting a substantive economic turnaround, almost all those identifying the constraints have identified the paucity of parastatal service delivery as one of the keymost ones.

First and foremost of the service delivery deficiencies which are impacting so negatively is the provision of essential energy supplies.  Save for some relatively limited usage of private sector generators, the exclusive source of energy is Zesa, primarily electricity generated from the Hwange thermal power facility, and from the Kariba hydro-electric infrastructure, marginally supplemented by electricity imports from some of Zimbabwe’s neighbouring territories. The extent of such imports is markedly minimised by a combination of many of the neighbouring countries having limited excess electricity over their own national needs, and by Zesa’s inadequacy of resources to fund the imports.

However, limitations of energy generation by Zesa have been very markedly exacerbated by most of its infrastructure becoming increasingly aged and, therefore, ever subject to increased frequency and extent of mechanical breakdowns.


This circumstance has progressively been further worsened by Zesa’s inability to maintain, adequately and fully, its generating resources, particularly due to funding insufficiency, and partially as a result of limited availability of requisite technological skills, many of its skilled personnel have gone to other countries in the region, and beyond.

In addition, energy delivery is recurrently impacted upon negatively by breakdowns in the national transmission network, in part as a result of paucity of maintenance, and partially due to recurrent vandalism and theft of transmission lines and equipment.

All of these circumstances confront Zesa with few alternatives but to resort to recurrent loadshedding, which is  extremely disruptive to the operations of industry, the mining sector, and others, grievously impacting upon productivity.

Loadshedding is also very demoralising and discomforting to the populace in general, resulting in increasingly great decline in productivity motivation.  Compounding the consequential economic losses, unscheduled disruptions in energy supplies frequently occasion massive losses for manufacturers through impairment of materials in the course of production.

The inability of Zesa to service the economy’s needs is intensified by the service delivery deficiencies of many other parastatals.  Air Zimbabwe, almost wholly due to financial limitations, has reduced its services to a greater extent.  Until recently it was servicing 25 domestic, regional and international routes, and now only seven.

As against a proud record, the envy of most other regional airlines, of exceptional punctuality and timeousness of flights, many Air Zimbabwe flights are now subject to time delays or cancellations.  This air service decline has negative consequences upon essential business travel and, therefore, upon the economy.  Very similar circumstances apply to the service delivery of National Railways of Zimbabwe.

Yet another parastatal’s service delivery decline that is impacting negatively upon the economy and, therefore, upon attaining a substantial economic recovery, is that of TelOne.  Although it has demonstrated itself as a customer caring service provider on many occasions, and particularly so in Matabeleland, it too suffers from financial illiquidity, and losses of skilled personnel, severely affecting service delivery, and its service constraints intensified by the domino effects of erratic energy supplies.

If government has a genuine intent to restore economic wellbeing to Zimbabwe and its people, one of the extremely urgent needs is to address — comprehensively and constructively — is the rehabilitation of the parastatals.

However, the harsh fact is that it does not have the resources necessary to do so.  To all intents and purposes, government is bankrupt, with debt approximating US$7 billion, and annual revenues being minuscule as compared to essential expenditures.  There is, therefore, only one way whereby a complete, and relatively rapid, transformation of parastatals, and restoration of their effective service delivery, can be achieved, and that is by effective privatisation of the parastatals, in whole or in part.

By merely divesting itself of ownership of the parastatals, government will not restore their wellbeing.

The disinvestment must be primarily in favour of investors who are able and willing to recapitalise the parastatals to the full extent necessary for effective, ongoing operations, and who can also accord the entities with comprehensive access to requisite technological skills.  The investors must not only be providers of finance but, to all intents and purposes must also be strategic operational partners.


In pursuit of such partners, government must have an unequivocal recognition that there are few, if any, of investors in Zimbabwe with the required resources and, therefore, despite the excessive governmental fixation on indigenisation, the investors will have to be sought further afield than in Zimbabwe.


That does not preclude some indigenous equity participation, be it by way of employee share participation, listing on the Zimbabwe Stock Exchange, or otherwise, but a major portion of disinvestment must be in favour of foreign investors who can provide the parastatals with the finance which they desperately, and critically  require.

A by-product benefit of parastatal privatisation is that the impoverished government will realise some inflows to the fiscus from the investors, and concurrently can achieve release from guarantees it has given for loans resorted to, over the years, by many of the parastatals.


Ministers Tendai Biti and Gorden Moyo, as well as some others, have often emphasised the need to progress parastatals’ privatisation as a matter of urgency, but that is yet to materialise.  Doing so now requires unreserved, determined, rapid, real action for, if that is not the case, the prospects of a meaningful and expeditious economic recovery are non-existent.

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