It’s business as usual

Banker Ralph Watungwa recently gave a glimpse of the rot in parastatals and State-owned entities.

“I sit on one board where this board member whenever there is a meeting, he orders two chickens, one to eat at the meeting and the other to carry home. This needs to be dealt with,” Watungwa told Finance minister Mthuli Ncube at a post-budget meeting in Harare last week.

The reputable banker, who has been at the helm of Standard Chartered Bank Zimbabwe since 2012, wants the government to “move very fast on them”. “They need to be dealt with very quickly,” the Bankers Association of Zimbabwe president said.

To the board member, ordering two chickens is normal; after all it is his or her “time to eat”.

But this transgression is minute as parastatals have become the feeding troughs for board members and ministers.

Board members have been used to marathon meetings discussing nothing so as to cash in on board fees. Some parastatals foot the bill for board members to go on annual holidays.

Others pay board members their fees in advance notwithstanding the possibility that they might not attend the meetings.

It is this mentality that has brought a number of parastatals to the ground as corporate governance tenets are thrown out of the window.

Watungwa’s illustration of the rot could not have come at a better time than now with the President Emmerson Mnangagwa’s administration preaching about reforms.

It means they require the ruthlessness of a debt collector to change the mindset at these entities. State enterprises and parastatals (SEPs) play a pivotal role in the provision of services as key enablers or regulators. In 2017, SEPs represented about 14% of the country’s GDP, with commercial SEPs contributing about 7.5%, against a potential of over 40%.

In his 2021 National Budget, Ncube said Zimbabwe would abandon a decentralised SEP model which has seen ministers interfering in the running of the affairs of the entities. 

In its place will be a centralised SEP model. He said the reform momentum would be accelerated in 2021 and beyond, through completion of on-going partial privatisation transactions of identified SEPs and implementation of the new SEPs Ownership Model approved by Cabinet.

The reforms road has been travelled before with drivers hitting a brick wall at implementation stage. The stop-go privatisation has been with us for over a decade. The longer it takes to bring sanity in SEPs, the harder it will become in attracting those from the private sector to sit on boards.

The “it’s our time to eat” syndrome is inimical to SEPs reforms and shows that even in the new administration, its business as usual.

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