Parastatal restructuring slow, says minister

previously expected.
In a progress report to Cabinet, State Enterprises and Parastatals Minister Gorden Moyo admitted that the process was “progressing slowly”.
Last year in August, Government identified 10 State entities, which were given the green light to restructure. These are Ziscosteel, Cold Storage Company, Zesa Holdings, Grain Marketing Board, Air Zimbabwe, Agribank and tne Civil Aviation Authority of Zimbabwe.
In identifying the companies, the Government considered their strategic importance to the economy. Minister Moyo yesterday said although progress was being made, it was slower than expected.
The Government has successfully privatised Ziscosteel, after selling its 54 percent shareholding to an Indian firm, Essar Holdings.
National Oil Company of Zimbabwe has been unbundled into two companies – Petrotrade and the National Oil Infrastructure Company of Zimbabwe.
The two entities started operations last January. Transfer of assets from Noczim to the successor companies for accounting purposes has been concluded.
The restructuring programme resulted in 106 employees being considered for retrenchment.
Minister Moyo said it had been recommended to partially privatise Agribank through private placement of 49 percent shareholding to a strategic partner. Government would retain 51 percent.
A restructuring proposal for Zimbabwe Power Company is being considered.
A technical committee of the Ministry of Energy and Power Development, Ministry of Finance, State Enterprises Restructuring Agency, Zesa Holdings and ZPC has prepared a draft.
The restructuring proposal for the GMB seeks to unbundle the national granary into the strategic grain reserve and a Special Purpose Vehicle.
The SPV will comprise five commercial strategic business units – commodity trading, farming and farmer support, agro-processing, logistics and polybag manufacturing.
The commercial units will later enter into partnership with investors to recapitalise new entities.
Government last year approved the initiative to lease CSC Bulawayo abattoir and ranges.
But the investor withdrew at the conclusion of the deal due to what werfe termed “financial problems”. CSC has now been tasked to bring a new proposal for consideration.
The Civil Aviation Authority of Zimbabwe will be split into entities responsible for civil aviation regulation and airports management.
Most parastatals and State enterprises have been losing money over the past decades, with their accounts not being properly audited.
Lack of a sound corporate governance framework had largely contributed towards their poor performance.
This prompted Government to adopt a Corporate Governance Fframework for State Enterprises and Parastatals to attract investors.
Zimbabwe has 78 parastatals and State enterprises, most of them “underperforming”, despite their strategic importance to the economy.
Over the last decade, the parastatals and State enterprises have been a burden to the fiscus as they relied on perennial handouts caused by viability constraints.
But their directors and heads of departments were handsomely rewarded.