‘Govt will not assume parastatals’ debts’

“We are not taking over any parastatal’s debt, even that of Air Zimbabwe,” he said.
He was addressing delegates at a Zimbabwe National Chamber of Commerce (Harare)- organised meeting last week.
“What we may do is set up a statutory Special Purpose Vehicle (SPV) to park a parastatal’s debt. We will not increase Government’s sovereign debt.” A large portion of the parastatals’ debts are between the parastatals themselves. Minister Biti noted that a number of the parastatals were presently at loggerheads over settlement of the debts between themselves due to disagreement over the Zimbabwe dollar/United States dollar exchange rate.
Zimbabwe has been using the multi-currency system, predominantly the United States dollar, since early 2009.
According to official statistics, the inter-parastatal debt had risen by 69 percent to US$1,5 billion in six months to March this year. The inter-parastatal debt stood at US$488 million in September last year.
Observers note that the inter-parastatal debt and debts owed by other creditors have crippled public entities, resulting in them being unable to effectively fulfil their mandate.
However, according to indications from the Mid-Term Fiscal Review Policy Statement, the Government is now working to expedite the liquidation of the debts.
“In order to assist in reducing local authorities and inter-parastatal net indebtedness, clearance of arrears to these entities will be directed to the respective parastatal/local authority creditors.
“Hence, where Government owes a parastatal, which in turn also owes another, clearance of such indebtedness will be directed to the net creditor parastatal,” read part of the fiscal statement.
Meanwhile, the Finance Minister has said that top management in parastatals will now have a limited tenure.
“We have seen chief executive officers in parastatals who stay in these positions for over 15 years to the extent that they become ‘chefs’, untouchables as it were.
“However, the new constitution has done something drastic over this issue, as well as for the positions of permanent secretaries to encourage leadership renewal,” he said.