HomeEditorial CommentPrivatisation law: Headwinds on the way

Privatisation law: Headwinds on the way

LAST week’s announcement by Finance minister Mthuli Ncube to push through legislation giving impetus to reforming largely broke and insolvent State firms marked an important milestone towards addressing a serious problem. Parastatal reforms have been long overdue.

These decaying former behemoths have not only been a needless drain on public finances. They have been turned into dark enclaves through which unrestrained pillage and plunder has been executed by a few elites and their cronies. They have built caricatures of embassies under an emerging trend where expensive real estate gems are taking shape around the foothills of strategically located mountains overlooking big cities — a surprising thing in a country rated among the worst performing, economically.

As various investigations have exposed, looters have been globetrotting, luxuriating in the finest hotels in fruitless missions undertaken ostensibly to represent these bankrupt assets. The truth is, they represent none. These have been nothing but wicked self-enrichment schemes to prop up their own ill-gotten fortunes.

But these criminals have been allowed to roam the streets with tainted hands. The State firms — over 100 of them — once contributed 40% to Zimbabwe’s gross domestic product. This figure plummeted to 12% last year. Their employment capacities once ranged anything between 300 and 3 000, or beyond before decades of relentless mismanagement kicked in.

Today the majority of State firms have scurried to seek respite under the Insolvency Act, which protects them from frustrated creditors and workers threatening to sell off assets and recover billions. They are untouchable. Over many years, attempts to privatise and unlock fresh capital, technology and ideas have been resisted.

Big shots within the establishment are determined to cling on to haemorrhaging assets by scuttling anything that brings order and close long established avenues of theft and kleptocracy. Crafty, the looters are aware that order brings profligacy to an end. They would rather throw spanners to avoid privatisation than allow reforms to proceed and lose out.  This is why a law criminalising and punishing individuals working against progress may be necessary. But in pursuing this strategy, Ncube faces significant hurdles. The looters’ influence cascades into legislative power. This means Zimbabweans may wake up one day with a law that hands over these assets to the usual suspects. Events at Fidelity Printers and Refineries in the past week have been pointing into this direction.

Worse still, Zimbabweans may end up with a law that is just another toothless bulldog, a legislation without practical effect. This has happened in recent legislations like the Public Finance Management Act, which came through a decade ago setting tight reporting conditions for State agencies to enhance accountability. But it has barely been used to achieve this goal. More roadblocks could be on the way as Ncube tackles the parastatal reforms agenda with a new perspective, surrounded by compatriots who would be happy to see his efforts flop. Convincing them to see the light will be key to his progress or failure.

Recent Posts

Stories you will enjoy

Recommended reading