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He said challenges to regulation in Zimbabwe include a fragmented approach to regulations, lack of independence of regulators, absence of regulators in some sectors, multiple regulation, mixing of ownership and regulatory functions and regulators playing a dual role of being a regulator and a service provider.
Minister Moyo said the best practices in corporate governance, as provided for in the Corporate Governance Framework, require that there be a clear separation of the ownership function and the regulatory function.
“Some sectors, for example, the railways sub-sector, has no independent regulator,” said Minister Moyo.
The National Railways of Zimbabwe is an example of a SEP that self-regulates on standards relating to safety matters and the infrastructure it provides, while some regulatory activities are vested in the line ministry.”
Commenting on the proposed restructuring of the NRZ, the African Development Bank said Zimbabwe would need to create an appropriate regulatory capacity.
It said there was need for the creation of a single entity that would be responsible for regulation of the entire transport sector.
The design of the regulatory framework will need to be aligned with the form of restructuring adopted by the Government.
Civil Aviation Authority of Zimbabwe, Minister Moyo said, was an example of a State enterprise that plays a dual role of providing civil aviation services, and serving as the regulator of the industry.
The Forestry Commission, Zinwa and NRZ are other examples also playing a dual role of being both a regulator as well provider of services.
International and regional best practice calls for the separation of the regulatory functions from the service provider functions to mitigate against risks associated with conflict of interest.
The minister also cited multiple regulations, for example, in the road transport sector.
Some regulatory functions for the road sector are shared between the line ministry and Zinara.
The regulation for road safety is shared between the Traffic Safety Council of Zimbabwe and the line ministry.
Tariffs are not formally regulated in the road transport sector resulting in consumer exploitation.
He said the Water Act regulates the management of water, while the regulation of water and sanitation services is guided by other Acts such as the Mines and Minerals Act, Urban Councils Act, Rural District Act, and the Environment Act.
He said there was no unified Act for regulation of water and sanitation nor a regulatory agency in this sector.
Some regulatory activities are vested in Zinwa while others are vested in Minister of Water Resources Development and Management.
Such a set-up compromises accountability and effective regulation.
“It is noted that in Zimbabwe, in most cases, the ownership function and the regulatory function are both domiciled in the same ministry with most regulatory functions vested with the minister while he/she is the point of appeal for aggrieved parties against the decision of the authority.
“The minister is also the Government representative shareholder. This further compromises the independence of the regulator,” he said.
Online Reporter