At a cabinet briefing last Tuesday afternoon, Industry and Commerce Minister Mangaliso Ndlovu said government’s drive to restructure 43 state-owned enterprises had gathered pace starting with the resuscitation of yesteryear steelworks giant, Ziscosteel and the partial privatisation of fertiliser and chemicals manufacturing company, Chemplex Corporation.
To wean off loss-making entities that are currently hemorrhaging state coffers, the government has given under-performing parastatals such as NetOne, TelOne and People’s Own Savings Bank (POSB) between six and nine months to conclude privatisation deals.
The above developments and a lot more measures, is what will take our economy forward.
Tough decisions have to be taken along the way as some entities continue to operate under 1965 Universal Declaration of Independence business models.
In 2016, for example, 38 out of 93 audited state enterprises incurred a combined $270 million loss because of dislocated corporate governance practices, corruption and ineffective control mechanisms.
Finance and Economic Development Minister, Professor Mthuli Ncube said recently that the Treasury spent half a billion dollars supporting struggling state enterprises and parastatals over the last two years.
The taxpayer has borne the brunt of all this decay.
It is unacceptable that such entities, which are supposed to be driving economic growth, continue demanding lifelines.
It is worth noting that these entities used to contribute 40 percent to the economy, but have seen them run down and now contributing an insignificant two percent.
What is refreshing is that if Ncube’s proposal for a bloodbath on the deadwood succeeds this could reap proceeds of up to $350 million next year.
It is such plausible determination and resoluteness that can bring our ailing economy out of the doldrums.
There are also reports that some companies will be liquidated which is a welcome development.
There is need for these parastatals to revise their business models and in the process modernise their operations in line with world’s fast moving trends.
It is the attitude of business as usual and applying archaic methods which saw companies such as the Cold Storage Commission and POSB biting the dust.
They could not match the efficiency and diligence of private sector players who came up with innovative models of transacting both locally and internationally.
Bernado Martinez, managing director at Funding Circle in the United States says; “Customers today have more choices than ever, and they have shown they will gravitate towards those who prioritise the delivery of fast, seamless and personalised service. This is true whether they are ordering lunch, getting their car repaired or making a financial transaction. In my industry of financial services, we’ve already seen large legacy companies start to fall behind smaller startups who offer better user experiences.”
Great piece of advice to our own parastatals in Zimbabwe.
There is need for these entities to embrace technology as the fulcrum of operations for easy market intelligence, to learn new trends and avoid red tape.
Through social media interactions they will be able to interact with their publics and stakeholders, although technology will not replace the human touch.
Like what English naturalist, geologist and biologist Charles Darwin said: “It is not the strongest of the species that survives, nor the most intelligent; it is the one most adaptable to change.”
It is time for these companies to change or face extinction.