Ideal time for privatisation

HARARE - Revelations that have emerged out of parliamentary committee probes regarding operations of parastatals make it indispensable for government to introspect and rethink about the national value derived from these quasi-governmental institutions.

Invariably, parastatals have become an albatross round government’s neck and a serious drain on national coffers as the majority rely on government to dole out money for their continued survival — money that could best be deployed to fund other essential services for public good.

These committees have been favoured with jaw-dropping loses parastatals are incurring without exception. Yet government seems to lack commitment and will power to act decisively to stop the rot.

When a quasi-governmental enterprise such as the National Railways of Zimbabwe (NRZ) admits to reeling under serious debt and attempts to attribute its parlous financial state to economic sanctions, the State should begin to genuinely pry the performance history of the institution and interrogate reasons for the gradual decadence that blighted it before 2000.

None of the parastatal executives appearing before the select parliamentary committees have come up with plausible turn around strategies other than provide countless excuses why they have failed to rein in and roll back the tide of eminent collapse to justify their continued dependence.

Understandably, government faces the dilemma between taking the hard decisions to re-engineer a plethora of superfluous loss-making parastatals and worsen the unemployment figures at a time when joblessness has spiked to unprecedented levels.

On the other hand, the level of joblessness implies diminished tax inflows to the Treasury and the fiscal drain by loss-making parastatals becomes unsustainable unless government tells executives running these behemoths to “eat what they hunt.”

Barring national pride, the alternative is to privatise parastatals that gnaw at the core of better financial husbandry.

An existing example of how privatisation can address this fiscal plague posed by parastatals is Dairibord Zimbabwe which has flourished beyond initial expectation when it changed tack.

Dairibord has charted a path and set a prototype that parastatal executives can emulate, thus giving the taxpayer a deserved reprieve.

And in the midst of such debilitating losses characteristic of these enterprises, it surprises ordinary Zimbabweans when a minister pronounces desire to introduce yet another parastatal — the Zimbabwe Port Authority — seemingly unaware of the onerous burden existing ones are saddling the Treasury with.

This is an ideal time to order loss-making parastatals to operate on their own steam other than rely on rattling the begging bowl at Treasury’s doorstep.

Comments (1)

Excessively huge salaries for CEOs have largely contributed to heavy losses in these parastatals . Worst of all, these parastatals are headed by political appointees-NOT professionals. But of course privatization may produce the much needed profits in the loss making parastatal organizations.

SALARYGATE - 10 July 2014

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