A root-and-branch process

(Last Updated On: November 17, 2022)

 

Revelations by the State Enterprises Restructuring Agency (Sera) that there has been resistance, mainly from line ministries, on a noble attempt to reform loss-making state owned enterprises (SOEs) and parastatals makes sad reading.

According to Onesimo Musi, the Sera chief director who was speaking during the 2022 public sector convention held in Harare on Tuesday, resistance to change has been so glaring since 2018, a development observers have frowned upon.

He says: “The reform agenda started in 2018 for SOEs to be high performers which can contribute meaningfully to the GDP. But, the progress has been slow because there has been resistance to change.”

He said the balance sheets of those earmarked for partial privatisation have been weak and that there was resistance from line ministries.

First thing first. Zimbabwe cannot allow such a noble plan to reform the entities go to waste as some few individuals are resistant to change.

State owned enterprises and parastatals are key to economic growth and when they sneeze, the economy will catch a cold.

Reform has been the buzzword of the President Emmerson Mnangagwa administration as it seeks to provide a stable environment in which business thrives.

For all of the administration promises, it has failed to fix this puzzle and making it synonymous for long on talking but short on delivering.

If there are ministers that are slowing progress, they should be told to step aside. That era of creating fiefdoms in SOEs is long gone. These entities cannot be the feeding troughs of ministers or executives. They should play their roles in the economy.

Citizens want results and not explanations on how the results could not be achieved.

It is the taxpayer that is bearing the brunt every time the Treasury steps in to bail out mismanaged SOEs.

The signing of performance management contracts by executives in these entities was the step in the right direction. Authorities should go beyond that by ensuring that the executives are living to what they signed on. They should be held accountable.

The inefficiencies of the SOEs is a cost on business and affects the ease of doing business. It makes local companies uncompetitive.

Zimbabwe has 107 SOEs and parastatals which are contributing 10% to GDP from 40% in the heydays.

They have become the breeding grounds for corruption with the Treasury revealing recently that suppliers were inflating prices.

Even the Auditor General reports points to how such entities have become a haven for corruption. This cannot be allowed to continue.

The Treasury has introduced the value for money concept which penalises officials that play a midwife role in inflating prices.

Left on their own, these SOEs and parastatals can recede to the dark past of anarchy like what happened at the Zimbabwe National Road Administration (ZINARA) some years ago.

An executive with a diploma in Religious Studies found himself as the Administration and HR director at ZINARA.

The new ZINARA, led by board chairman George Manyaya, has pledged to handle statutory funds with high levels of probity and propriety.  This is the transformation citizens want to see at these entities.

That reforms cannot be taken due to resistance to change is a lame excuse that should find few takers.

Citizens want to see thriving SOEs and parastatals like what is happening in other economies such as China.

The economy cannot be held to ransom by a few greedy individuals that see SOEs as piggy banks. A root-and-branch reform process is required as of yesterday.

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