IN response to “Parastatal boards, CEOs face the chop” (Zimbabwe Independent, September 7) I agree with economist John Robertson that performance-based contracts do not work in under-capitalised industries, a situation obtaining in virtually all state-owned or controlled enterprises.
The services/goods offered/produced by state-owned enterprises are not commensurate with the revenue thereof.
A case in point is the inability or unwillingness of customers to service their bills regardless of whether they are relatively rich or poor, as a recent list of Zesa defaulters showed.
This problem needs to be addressed first and should rank high on cabinet’s to-do list.
Our problems have been compounded by Zimbabwe’s pariah status at international level as well as the dearth of a shared vision and values.
Concomitantly it is necessary to move all state-owned enterprises from other line ministries to the State Enterprises ministry and have a board of directors supervise subsidiary boards of individual parastatals.
This will enable the line ministries to attend to their core mandates and more able to complement the State Enterprises ministry.
The main task of the board would be to re-capitalise the parastatals and privatise some of them if needs be. Only after restoring sanity can performance-based contracts for parastatal CEOs be a viable corporate governance tool.
State Enterprises and Parastatals minister Gorden Moyo might want to note that of the 42 Chinese companies in the Fortune 500 list of the world’s biggest firms in 2010, all but three were owned by the government.
Experts have said getting as many companies into that select group was a matter of deliberate policy, not a coincidence.
Cabinet should ensure the Minister of State Enterprises and Parastatals gets one state-owned enterprise onto the Fortune 500 list in at least 15 years from now. The challenge should begin at the top.