Public Sector: Cutting the feet to fit the shoe?

By His Excellency President ED Mnangagwa

Ever rising demand for power

As I write, Zesa is grappling with a long backlog for power demand.

To make matters worse, this backlog includes new industrial and commercial projects long approved and waiting for power to come on stream.

And the demand for power continues to grow by the day, including from Foreign Direct Investment projects by which our attractiveness as an investment destination is judged.

Certainly we lag behind this ever burgeoning demand for power which we should have long forecast to make matching investments on power generation.

More power, greater growth in Economy

One accurate way of measuring the pulse of an economy is through power consumption, especially by corporates.

This means there is a bright side to the power backlog: it points to growing mining and industrialisation in the economy, and thus an expanding mining and manufacturing sector.

This in turn creates more, better quality jobs, especially for our youths.

It means the measures we have put in place and continue to fine-tune in the economy, are paying off handsomely.

But the power supply stricture could very easily arrest and spoil this positive development.

Expanding power generation

Mindful of that surge in demand, we worked on Kariba South Extension; we embarked on Hwange 7 and 8 generators, using Chinese capital and expertise for both mega-projects.

Generators one to six at Hwange which we rely on currently, with varying efficiency levels, are and will be refurbished for optimum and reliable output.

We are also working on upgrading small thermal stations in Bulawayo, using Indian capital.

All this is over and above the many solar project we have approved, which are at different stages of development, in line with our transition to green energy.

We still have green field power projects, like the giant Batoka which we share with Zambia; and many more bi-national projects on power.

Of course our prospects for gas remain untapped; with what is happening in Eastern Europe, I see us turning to that option sooner, and with haste.

Taking stock

Our thermal projects rely on adequate stocks of coal fed to move boilers and turbines that give us the power.

Therein comes many coal miners who are hard at work in Hwange. Sometime last year, I paid a working visit to Hwange so I am satisfied we are ready for this massive expansion in thermal power production, and for coking coal which we also require to turn the wheels of heavy industry, in line with our local beneficiation goals.

This year, I went back to commission Deka water pipeline which feeds into Hwange 7 and 8.

We are set on launching Generator 7 towards end of this year, possibly in November, and Generator 8 early next year, possibly in February.

All told, we will have some 600 megawatts added onto our grid, thus helping Zesa meet part of the ever rising demand for more power.

SPB throttles power projects

Just this week, I received a disturbing report on our state of preparedness in respect of firing our thermal generators, both existing and new ones.

Our coal miners and merchants are not sure they will cope with this expanded demand for coal.

Why? Because rules governing our Procurement Regulatory Authority of Zimbabwe require that we work within year-long supply contracts, in the double sense of supplier choice and tariffs!

Yet coal miners and merchants require to invest in huge, costly equipment, both to extract thermal coal and to convey it to the Zesa Station.

This requires huge capital outlay, much of it accessed through borrowing.

Lenders can only do so on certainty of viable contracts which make banking sense.

Who lends to an operator with a mere year-long supply contract? Which borrower even wants the risk?

Some perverse delight

On its part, Zesa requires buffer stocks which ensure the boilers keep boiling! On such uncertainty? Meanwhile, we have this false constraint by way of senseless rules applied with equal senselessness by somebody we call Procurement Regulatory Authority of Zimbabwe?

It is as if PRAZ is God-made, and run on a God-sanctioned commandment which must not be changed, let alone broken! It gets you to wonder whether someone is not out to derive perverse pleasure from an idle yet completed facility, all in the season of national power deficit.

Sad story of cotton sub-sector

I move to a second case, again drawn from the public sector.

Government moved definitively to resuscitate an otherwise dying cotton growing sector.

Dying because no one in the cotton business wanted to support cotton growers through backward linkages.

Yet this is an agricultural sub-sector giving livelihoods to thousands of our people in rural areas.

A product which, over the years, has created numerous cotton magnates, all on the back of unrewarded peasant effort.

We do very little cotton beneficiation in the country; much of our cotton gets exported in semi-processed form.

The earnings are promptly made to our exporters.

It turns out not all bring back all the earnings back into this

Economy, let alone share these with peasant farmers who toil in scorching sun to produce this vital input.

Slaughtering the golden goose

There is worse.

I said Government moved in to support cotton growers by way of seed, chemicals and fertilisers, all this at no cost to cotton companies.

Once harvested, these risk-averse or downright exploitative companies buy all the cotton, quite often at very low, extortionate prices.

Much worse, they do not pay farmers on time.

Or make them have a share in foreign exchange earnings they rack in.

It gets one to wonder what the real goal is.

Why would bona fide corporate bodies simply slaughter the goose that lays the golden egg, while hoping for more, better business the season after?

By our own bootstraps

Example three. We set up National Social Security Authority (Nssa).

It is now a multimillion dollar behemoth.

The other day I got a report indicating the number of workers paying subscriptions to Nssa continue to increase yearly, again showing our economy continues to grow and create more jobs.

This is very good news for us and our Nation.

We are raising ourselves by our bootstraps, unaided, and in spite of crippling sanctions.

This is the true Zimbabwean spirit, encapsulated in our mantra, NYIKA INOVAKWA NEVENE VAYO.

More headaches from Nssa

Yet more disturbing news come from there.

On the eve of my departure for Davos, Switzerland, for the World Economic Fund (WEF), I got a disheartening report pointing to corporate rot in Nssa.

This isn’t the first time Government had got such disturbing report; Nssa has been a thorn in our flesh, a pain that will not go away.

Why such a cash-rich institution with such a wide remit on investment possibilities simply decides to stash millions, and abuse no less, in a country and economy so embattled by both endogenous and exogenous adversities, no sane human being can ever fathom, least of all those of us in Government.

Nssa’s equivalents in various jurisdictions are on the cutting edge of public investments.

They determine national course and direction.

Not so our Nssa here.

All it does is to give us headaches, while pushing workers into abject misery on retirement.

The time may have now come for us to re-locate the headache to where it should be suffered, namely in heads of those begetting corporate malfeasances, all to our collective detriment.

What is to be done

I gave the above three snapshots, and in strongest language, to illustrate and to underline Government’s mounting frustration, impatience and anger.

The rot in State Enterprises, coupled with the sheer lack creative management and interpretation of man-made rules, has got to a stage where institutions we create for the economy, become a danger to it.

Very strong measures and interventions may now have to be made.

A Procurement Regulatory Authority of Zimbabwe which does not scan the environment in order to audit, adjust and improve its procurement rules and functions, in anticipation of vital projects with long gestation periods, is no good for Government or for our Economy.

It negates its very reason for existence; indeed, it fetters the very economy it is supposed to pep and grow, often by tenaciously upholding and enforcing senseless rules.

It is like the foot has to be cut to fit the shoe.

Loosen senseless rules

The rules governing tenders for coal miners and merchants must and will be suitably changed to ensure they enable investments required to so coal is supplied in adequate quantities to all the eight generators.

There has to be prompt movement in that direction, as soon as yesterday.

This Government will change those “laws” and rules attributed to a false corporate Moses who has stood in the way of our progress.

Account for all your actions

Those in charge of Cottco must quickly change their ways; there is no time any longer, certainly no patience in us to suffer their reprehensible conduct.

The cotton, after all, by right belongs to Government by virtue of input support.

The earnings being stashed abroad belong to this country.

Government shall have what it is owed; farmers shall be paid what is overdue to them.

Above all, the economy will have all its earnings transparently accounted for by all players, Cottco included.

Play your designated roles

Nssa will come right; speedily too, so it plays its designated role both as a social security vehicle and as a way of mobilising usable savings for this economy.

Its agenda was drawn up as broadly national; yet its performance and vista is parochial, in fact anti-worker and anti-national.

Going forward, it will do the right thing, making itself positively felt as a national institution which must play its part in cushioning and expanding our economy against shocks.

Active agents in NDS1 ecosystem

We have drawn up National Development Strategy 1.