HomeOpinionWay past time to privatise SOEs

Way past time to privatise SOEs

FOR many years, the government has misled Zimbabweans into believing that the stinking corruption and mismanagement that has grounded State-Owned Enterprises (SOEs) is under control.

There is now doubt that President Emmerson Mnangagwa’s administration is sincere in its campaign to flash out the vices that have drained billions out of these crumbling firms — once powerful gems that contributed 40% to GDP.

This figure has plummeted frighteningly to 7,5%.

Government’s procrastination and half-hearted steps towards applying brakes to the cannibalisation of SOEs raises questions.

Are the elites buying time to create space for looters to enrich themselves?

By delaying selling off these companies, resources are literally being stolen to oil the expensive lifestyles of well-connected people and their cronies with unlimited access to tenders in these poorly governed SOEs. From experience it is known SOEs are the feeding bowls of powerful figures which if sold, some tummies surely will shrink.

This is why none has moved a finger since talk of selling off State firms began many years ago. Disposing of SOEs, merging and even reducing them to department status in State agencies will save billions which these bottomless pits are guzzling.

It is surprising that everyone acknowledges that reforms are important. The privatisation of the Dairy Marketing Board into the present day Dairibord Holdings is one example.

Yet another example was the privatisation of CBZ Holdings, which was transformed into one of SADC’s most successful financial institutions and the largest in the country.

Yet despite all these examples, the government still wants to cling on to the SOEs and many of them have become feeding troughs for retired army generals and cronies of those in authority.

We urge Mnangagwa’s government to do the right thing. Privatisation is the path that many countries are taking successfully.

Governments are stepping back from running businesses to regulating them. This should be the case in Zimbabwe.

The mantra ‘Zimbabwe is Open for Business’ must be exploited to the fullest. It must not be reduced to mere talk. We must leverage on it to attract investments into SOEs along with private sector firms.

Once the government achieves this, it can be a small but vital step towards economic recovery. Mnangagwa and his team know this, they have talked about it. But they are reluctant to let go.

In the absence of reforms Zimbabwe will continue spending billions to prop up SOEs. They have burnt at $10,45 billion in losses stemming out of mismanagement and plunder in the past nine years.

This figure could be as high as $37,6 billion if computation of the losses are made based on higher probable figures revealed by the Ministry of Finance last week.

This translates into about $4 billion the amount of taxpayer funds that have been lost yearly by the 107 SOEs in the past nine years. Zimbabwe can’t continue like this.

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