Online Reporter
Dr Willard Manungo
We are at a moment of profound significance in Zimbabwe’s public sector reform agenda.
The development of a National State Enterprises and Parastatals (SEPs) Policy represents a landmark initiative, one that has long been overdue and is now being pursued with the urgency and seriousness it deserves.
Let me reflect briefly on why this policy is so critical. Zimbabwe’s State enterprises and parastatals landscape has for too long been characterised by overlapping mandates, misaligned policies and fragmented legislative instruments.
These structural deficiencies have collectively contributed to underperformance by many State enterprises and parastatals and exposed our nation to significant fiscal risk.
It is a fact that in the 1980s, State enterprises and parastatals used to contribute over 40 percent to the gross domestic product (GDP).
It is also a fact that our State enterprises then started non-performing to an extent that they were then, or are then, contributing less than 10 percent to the GDP.
Now, faced with such a scenario, it does call for rethinking of what went wrong as our parastatals started deteriorating in their performance.
And as we look at this performance, the issue of coming up with public sector reforms intends to make sure that our entities get back to where they used to contribute more than the 40 percent of GDP.
We have had reports from the Auditor-General over the years that have painted a consistent picture: governance deficits, financial mismanagement and a troubling dependence on Treasury bailouts.
While sector-specific and institution-specific reforms have been undertaken, the absence of an overarching national SEPs policy has created inconsistencies in ownership models, corporate finance frameworks, governance structures and performance expectations among the various stakeholders. This fragmentation continues to undermine the potential of State enterprises to contribute more meaningfully to national development.
The Government’s resolve to address these challenges is unwavering.
As articulated in the Transitional Stabilisation Programme (TSP) back in 2018 and subsequent policy frameworks, which include the current National Development Strategy 2, which is for the period 2026 to 2030, the restructuring of State enterprises has been identified as a national priority.
These reforms aim to transition State-owned firms from longstanding reliance on Treasury support into commercially sustainable, high-performing entities.
Reform
So, how do we move forward?
Zimbabwe is on an accelerated development trajectory.
Thus, the development of a National State Enterprises and Parastatals Policy is not an academic exercise; it is a strategic imperative that will move Zimbabwe’s economy forward.
This policy will, therefore, provide the overarching framework that will, firstly, bring coherence to the ownership and governance models across the State enterprises sector, eliminating the current patchwork of inconsistent arrangements.
Secondly, it will establish clear performance expectations and accountability mechanisms, ensuring that State enterprises are managed with the commercial discipline and professional rigour that their mandates and public resources demand.
Thirdly, it will strengthen the legislative, regulatory and institutional frameworks governing SEPs, addressing the deficiencies that have long been identified in corporate governance, corporate finance and performance monitoring.
And lastly, it will provide clarity on the hybrid ownership model for SEPs, where the shareholding of some commercial State enterprises is now centralised under the Mutapa Investment Fund, whereas non-commercial shareholding of other State enterprises has remained under ministries, ensuring that the appropriate balance is struck between public interest objectives and commercial viability.
Policy
Development of the new policy is the culmination of months of analytical work by consultant Mr Andrea Bettoni and extensive engagement with stakeholders across Government and beyond.
The draft situational analysis report and draft National State Enterprises Policy that have been produced represent a solid foundation.
Let me make it clear that a policy is only as good as the process that produces it.
A policy that is developed in isolation, without the active participation of those who will implement it and those who will be affected by it, risks being irrelevant at best and counterproductive at worst.
This is why the validation process is essential.
All stakeholders must engage fully in the ongoing deliberations, scrutinise the draft reports, challenge the findings where necessary, offer constructive suggestions and share practical insights and experiences.
This is an opportunity to shape a policy that will define the future of Zimbabwe’s State enterprises and parastatals sector.
It is thus important to situate this State Enterprises Policy within the broader context of public sector and State-owned enterprises reforms that the Government is pursuing.
These reforms are comprehensive and interconnected.
They include strengthening oversight mechanisms through the development of comprehensive performance management frameworks for State-owned enterprises, reinforcing legislative frameworks to ensure accountability and implementing the hybrid ownership model to enhance commercial discipline.
The Mutapa Investment Fund, which is playing an increasingly important role in the State enterprises landscape, is a part of this broader reform architecture.
The policy we are developing will provide this overarching framework within which all these reforms will be coordinated and aligned.
The Office of the President and Cabinet, through the department responsible for public enterprises and parastatals reforms, will continue to provide the strategic leadership and policy direction necessary to ensure the success of the initiative.
Together, we can make a greater contribution to national development.
The task before us is significant, but the prize is even greater.
A State enterprise sector that is well-governed, commercially sustainable and capable of making a meaningful contribution to Zimbabwe’s economic development and the well-being of all its citizens is what we aim for.
Dr Willard Manungo is Deputy Chief Secretary to the President and Cabinet. He made these remarks during the Validation Workshop on Development of a National State Enterprises and Parastatals Policy in Harare last week.
