Govt ditches loss-making parastatals

HARARE - Government has decided to shut down loss-making parastatals and State enterprises, President Robert Mugabe said yesterday.

Mugabe made the announcement yesterday while addressing a high level interface meeting with industrialists at his official residence in Harare yesterday.

He said the decision was made in Cabinet during its traditional weekly meeting.

“We certainly share your concerns over the underperformance of the State enterprises and parastatals whose current contribution to the national Gross Domestic Product (GDP) is around seven percent, down from the peak level of 40 percent.

“The enactment of the Public Entities Corporate Governance Bill currently before Parliament is expected to help transform the fortunes of the sector through enhancing the entities’ compliance with sound corporate governance practices,” Mugabe said.

He revealed that Cabinet had decided to close parastatals since they have become a burden on the fiscus instead of contributing to economic development.

“I can reveal to you a Cabinet secret. We were discussing this subject on Tuesday. I was very negative about it and I could see the minister of Finance (Patrick Chinamasa) getting more and more depressed by my speech which ended by these words ‘they are non-performers, what we must do is provide coffins for them and bury them with the words Rest in Peace’,” Mugabe said.

He conceded that government had failed to transform fortunes of ailing parastatals — plagued by high overheads, inter-parastatal debts, maladministration, undercapitalisation, corruption and lack of good corporate governance.

Mugabe added that government had decided to do away with the burdensome parastatals which they had borrowed from Britain at independence in 1980.

Britain has since privatised the majority of State enterprises.

“I said we have had a history and I want to also refer to the country from which we had borrowed these awful money spenders, awful burdens around our necks, Britain.

“I did a degree around that subject.

“They were being run badly, they are being supervised badly.

“Their expenditures were zooming and no one was minding that.

“They had built one by one, huge expenditures that built huge debts until (the later former British Prime Minister) Margaret Thatcher started privatising them and disbanding others,” said Mugabe.

Returning Auditor General Mildred Chiri warned about the ability of 15 State-owned enterprises to continue as a going concern.

In her State Enterprises and Parastatals Report of 2016, the government auditor named Zesa Holdings (Zesa) and its subsidiaries; TelOne, Grain Marketing Board (GMB), National Railways of Zimbabwe (NRZ), Zimbabwe National Water Authority (Zinwa), and others as the main parastatals draining Treasury without contributing anything towards the national fiscus.

Comments (2)

It is surprising how the man and his cabinet has realised now that these parastatals are draining the fiscus a good 30 years after Thatcher left gov. The former imperial master realised the problem then and acted, they instead, decided to appoint their own to run them. I hear air Zim is now being run by another of them, I wonder if it is going to be provided with a coffin also.

Ziggy Zigawo - 9 September 2017

If all these loss making parastatals are cut off from the gvt financial support....then even the gvt itself is going to feel th effects!

dhewa69 - 10 September 2017

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