Govt needs to privatise parastatals without delay

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AMONG many pressing issues to be addressed if the economy is to be fully resuscitated is the revitalisation of parastatals and state enterprises. Their provision of essential utilities and services falls far short of the country’s basic needs.

Report by Erich Bloch

Chief among key service providers unable to meet national needs is Zesa.

The power supply authority is appallingly under-capitalised to fund its day-to-day operations, let alone modernise and expand its electricity-generating capacity.

As a result, Zesa cannot adequately maintain and operate its electricity-generating infrastructure, or source sufficient supplementary energy supplies from neighbouring countries.

Its funding constraints have also precluded modernisation and enhancement of its generation facilities as well as transmission networks, let alone the development of additional power stations.
Those financial constraints have also motivated many of its technically-skilled personnel to seek employment abroad.

Electricity is a key requisite for the manufacturing and commercial sectors, service providers, the mining industry and agriculture.
In addition, recurrent non-availability of electricity is also a major discomfort and demotivant for residents, compounding their economic demoralisation. It is yet another factor in Zimbabweans seeking residence in other countries.

It also hampers other infrastructural operations, such as traffic control lighting, resulting in innumerable road accidents at busy intersections.

Moreover, because of its parlous illiquidity, Zesa recurrently hikes its tariffs to levels above economic viability for consumers.
Similar circumstances afflict many other parastatals and state enterprises.

Among them is AirZim, the so-called “national airline” which for a long time now has not been functional. The carrier has since resumed flights which are all too often cancelled or delayed.

Moreover, AirZim has accumulated debt, including arrears in remuneration for its workers extending to more than a year.

Consequently, it cannot modernise and enhance its aircraft fleet, has lost its International Air Transport Association registration, thus negatively impacting the business community and the tourism sector.
Similarly, National Railways of Zimbabwe is in dire straits. Its inability to meet railroad transport requirements results in greater demand on road transportation services.

This has led to clogged border posts, lengthy delays in delivery of goods to foreign customers as well as in receipt from foreign suppliers of essential inputs.

Inevitably it has prejudiced the viability of industry. With the worldwide escalation of fuel prices, utilisation of road transport is progressively becoming costlier. This has a correlating effect on the pricing competitiveness of exports, and increases the operating costs of Zimbabwean businesses.

Yet another state enterprise which, despite major efforts to do so, cannot fully address national needs is the Zimbabwe National Water Authority (Zinwa).

Zinwa is constrained not solely because of adverse climatic conditions, but because government cannot avail enough funding to enable the development of new water resource access, conservation and maintenance necessary to meet national needs.

In fact, all too often Zinwa does not even have sufficient resources to maintain its existing infrastructure such as the boreholes at the Nyamandlovu which, if fully operational, could service almost 15% of the water needs of the city of Bulawayo.

It is thus overdue for government to recognise the only viable solution to the difficulties of the parastatals and state enterprises in meeting essential national needs is privatisation. The privatisation might not necessarily be 100%, but must accord private sector investors with a majority holding of equity.

Many international companies and other ventures have progressively intimated interest in acquiring control of parastatals. Their coming on board would provide considerable funding for development, upgrading and maintenance of operations.

It would also afford them access to the technology and know-how needed for revival.

Concurrently, privatisation can relieve government of much of its vast accumulated debt, and of the recurrent calls upon it for further funding.

Government needs to move away from its policy of “it’s mine, and no-one else can have it”, and instead recognise the immense economic benefits that would flow from constructive privatisation of its enterprises.
Government needs, without further delay, to appreciate that privatisation is a “must-do” for Zimbabwe’s economy, and for the comfort and well-being of the people.

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