malvernmugadzikwa
Business Writer
People’s Own Savings Bank chief executive officer, Admore Kandlela will stay at the bank until the completion of the privatisation of the state-owned banking outfit.
Kandlela’s contract expired last year, and in terms of the company’s retirement policy, was due to retire.
But his contract was extended by 12 months until this December this year. Acting POSB chairperson, Israel Ndlovu, told Business Weekly on Wednesday that the extension of Kandlela’s contract “is not open-ended” until the completion of the privatisation.
“We are at a stage where we need further authorisation from the authorities,” said Ndlovu.
POSB, which is wholly owned by Government and is going through partial privatisation as part of efforts by the Government to enhance the viability of state-owned entities.
Under the reforms, most of the parastatals, including NetOne and TelOne, will either be privatised or capitalised to perform better, and reduce reliance on state bailouts.
Kandlela said the bank’s partial privatisation will either be a private placement with a strategic investor, or an initial public offering.
A hybrid of the two was also considered. The partial privatisation of the POSB will involve government offloading a minority stake, and the proceeds used, in part, to capitalise the bank.
Most Government companies are operating at a loss, in the process depending more on Government bailouts. The State companies have been described as a missing link in economic turnaround. Since 2010, the Government has been pushing for privatisation, but little progress has been made on almost every targeted entities.
In 2020, Zimbabwe engaged the World Bank’s International Finance Corporation (IFC) to be transaction advisors for privatisation of its telecommunications companies NetOne and TelOne after cancelling a contract it had signed with Price Waterhouse Coopers.
NetOne and TelOne would be sold as one entity with Government retaining 40 percent shareholding. In addition to disposal of its stakes in POSB, Telecel Zimbabwe, Zimpost, the Government said it was looking at raising as much as US$350 million.
About 70 percent of state entities are technically insolvent, presenting an actual or potential drain on the fiscus, owing to weak corporate governance practices and ineffective governance control mechanisms. In almost every sector where they operate, SOEs are facing a number of challenges including lack of capital, low productivity and unsustainable debt.
Services have deteriorated substantially and even the welfare of their own employees is often in jeopardy.
The reform, which the government adopted in 2018 entailed options including liquidation, full privatisation, transformation to regulator, merging and de-merging and departmentalisation into existing ministries.
Bongani Ndlovu