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Since the introduction of multiple currencies in 2009 after the demise of the Zimbabwe dollar, the Government has failed to meet demand for funds from Treasury by various competing interests. On a number of occasions, Finance Minister Tendai Biti, in his budget statement, has allocated resources for various projects but come year-end, the money is either not released or only part of it is disbursed.
This is the situation that the National Railways of Zimbabwe finds itself.
The struggling parastatal was allocated $9 million in the 2013 national budget for its projects, but according to the general manager Air Commodore Mike Karakadzai, just over $1 million has been released so far.
Once a thriving parastatal, the organisation has been a victim of the decade-long economic stagnation which saw most companies scaling down operations and is now a pale shadow of its former self.
Reduced industrial output meant that freight volumes moved by the parastatal — its cash cow — have dwindled.
The problems facing the NRZ mean that it needs all the support it can get so that its operations are resuscitated.
Even if the economy was to be revived and capacity utilisation increased to 100 percent, such efforts would be futile if the country does not have a viable railway utility.
The railways play a major role in economic development. By virtue of being able to move thousands of tonnes of freight on a single trip, railways can significantly lower production costs and ultimately of the end product.
However, Zimbabwe is one of the few countries in the world where bulk commodities are being moved by road and this needs to be changed.
There are many reasons that businesses and industry are opting for the more costly road transport but we believe that if the NRZ is adequately capitalised, it can easily recapture the lost market and return to its old glory days.
One way to ensure that the NRZ becomes competitive and a bulk carrier of choice is to adequately fund it.
The Government can do this by ensuring that funds allocated to the parastatal are released on time.
Releasing just a fraction of the allocated money half way into the year will not do good to operations of the NRZ.
We hope the undertaking given by the secretary of Finance, Mr Willard Manungo, that treasury would release the outstanding funds from the NRZ budget allocation next week would be honoured.
Although it is a bit difficult to fathom where the money will suddenly come from, we will take Mr Manungo’s word since he is in charge of approving treasury disbursements and knows the Government’s bank balance.
On its part, NRZ must be innovative and try other means to raise capital. Days of the Government dishing out money to parastatals that are supposed to be commercial enterprises are numbered.
We believe that the economy, though depressed, provides an opportunity for the NRZ to make business.
Presentations by industry representatives at a recent symposium for the coal sector organised by the parastatal showed that the NRZ was failing to move bulk goods such as cement and coal.
These are the opportunities NRZ needs to take advantage of to generate money.
The begging bowl mentality among our parastatals must stop and instead they should be giving a dividend to the Government come year end.
Online Reporter