FINANCE minister Mthuli Ncube said yesterday slow progress in the privatisation of a string of broke state firms had become a major cause for concern in government, as he revealed authorities were planning to enact a law to accelerate reforms.
Most of firms that have failed to quicken the privatisation process were in the telecoms sector, according to a list released by Ncube during the presentation of the Mid-Term Budget Review.
These include NetOne, the mobile telephone provider and TelOne, the landline telephone provider.
The two have been subject for privatisation talks for over a decade.
But moves towards reforms were scaled up in October 2018 through the Transitional Stabilisation Programme, which proposed wholesale shifts in the administration of State firms.
When the minister presented the 2021 national budget in November last year, he re-emphasised the importance of weaning off State firms and lined up what appeared to be an accelerated path towards rebuilding mostly insolvent companies that have been held back by corruption and unrestrained theft.
In total, the budget earmarked the completion of partial privatisation of 11 State Enterprises and Parastatals (SEPs), together with an additional six units controlled by the Industrial Development Corporation (IDC).
An additional 17 Zimbabwe Mining Development Corporation (ZMDC) subsidiaries were also earmarked for privatisation in order to avoid throwing hard-earned taxpayers’ funds down a bottomless pit.
But presenting the mid-term fiscal policy review yesterday, Ncube indicated that while progress towards privatising most of the firms had been achieved, measures must be put in place in those failing to progress.
The bulk of them are lagging behind by an average of 36 months from the date of approval, being April 10, 2018.
“Minimal progress was noted with regards to the partial privatisation of NetOne and TelOne, Zimpost, Zupco, as well as the merger of Zarnet, Africacom and Powertel, and that of Broadcasting Authority of Zimbabwe and Potraz (Postal and Telecommunications Regulatory Authority),” Ncube said.
Government wants to push through a law to scale up the privatisation process.
Ncube said the law would be called a “Privatisation Law with a view to consolidate the authorising environment, prescribe clear roles for institutions, describe the methodologies, document the key principles and provide for sanctions”.
However, he said there was significant progress in other areas.
“A number of steps were instituted on partial privatisation and restructuring and some notable achievements have been recorded in the following areas. Successful conclusion of Grain Marketing Board (GMB) de-merger into GMB Strategic Reserve and Silo Foods Industries, including the subsequent debt financing of the newly-created entity, completion of Joint Venture Partnerships for eight ZMDC subsidiaries and completion of Civil Aviation Authority of Zimbabwe unbundling into a regulator, and the Airports Management Company, including the appointment of respective boards and successful departmentalisation of the National Indigenisation and Economic Empowerment Board, Board of Censors, National Library and Documentation Services and National Liquor Licensing Authority within respective line ministries,” he added.
There had also been success in the establishment of the AFC Holding Company, leading to the transformation of Agribank into AFC Commercial Bank and the establishment of a land bank.
In addition, the government engaged consultants in the re-bundling of ailing power utility, Zesa Holdings Limited. He said it has also completed the performance reviews and turnaround strategies for Zimparks, Allied Timbers, ZMDC, Forestry Commission, Agribank, the Infrastructure Development Bank of Zimbabwe (IDBZ), SMEDCO and SIRDC.
“There was also notable progress with regards to processes towards the partial privatisation of POSB, IDBZ, Allied Timbers and PetroTrade,” the minister said.
Ncube also said they were going to adopt competitive bidding as a default route for every privatisation transaction, unless there are some special circumstances that justify a deviation.
“This is against the background that competitive bidding allows for a level playing field, with no discrimination towards foreign investors or a particular class of investors,” he said.