‘Time to revitalise parastatals’

FN: Minister you recently announced that salaries of parastatal bosses would be slashed to an average of US$5 000 per month, how is this going to be implemented? Are you not likely to be in conflict with the country’s labour laws?
GM: Let me start by saying State enterprises are the engines of our economy, they are the enablers of our economy.
This is true of all developing nations. As you may be aware Zimbabwe has 78 parastatals in communication, energy and power development, transport, some in the mainstream industry while others have social imperatives. They have potential to contribute up to 40 percent of the Gross Domestic Product if they are fully operational.
As a country that is struggling to emerge from economic recession, you would appreciate that State enterprises have been adversely affected by the economic situation. Parastatals have suffered from a human capital skill flight, dilapidated and outdated equipment and undercapitalisation. This undercapitalisation is mainly because of the credit lines that are firing blanks. We also had issues of kleptocracy, corruption and lack of forward planning.
FN: What are you doing about this? It seems there is no recognisable change?
GM: My ministry is not an implementing department, but one that does the thinking. We are a standard setting and policy formulating ministry. A number of policies have been put in place, which include corporate governance and international best practices. As I speak all parastatals have functional boards with the right skills mix.
We carried a study on the salaries being paid in local authorities, private and public sector and informal sector as well as regionally. Out of this, the ministry then determined what kind of salaries that could be offered in quasi-government institutions. We are using a formula that looks at four things; comparability — with other sectors, affordability — can this parastatal afford the salary, sustainability — can a company sustain it and reasonability — is the salary reasonable given the current economic setup?
We looked at the approximate figures and came up with an average of US$5 000 as a competitive salary. Anything beyond that needs approval from the parent ministry. Each company is looked on case by case basis.
FN: How legal are these salary cuts?
GM: We should appreciate that we have a law in the country, which says salaries of designated posts, top echelons in parastatals must be approved by line ministries. If you had awarded a salary without an approval by your parent ministry, that salary to us does not exist. You have no legal issue at all because it was illegal.
We are saying all boards should present their salaries to the line ministries for approval. The line ministries use our formula to approve the wages. From our records a few of these outrageous salaries were approved. We are getting inquiries from ministries with salary proposals for advice.
So the question we ask is, was the salary approved, if not then it is illegal. In fact we should have said pay back because you were receiving an illegal salary, but we aren’t implementing in retrospect.
FN: Is there buy-in from other ministers on the move? What will happen if there is discord in implementation of this Government policy?
GM: We are implementing a Government policy. The Corporate Governance Policy is not a Minister Moyo policy, but a policy adopted by all ministers. The line ministries are in the front line of ensuring that Government policies are implemented. It is not Minister Moyo who will go to Zupco, Air Zimbabwe or ZMDC, but the line ministries that are directly implementing the policy.
We do the standard setting and they do the implementation. Discord in implementation is not Minister Moyo’s problem. I will not lose sleep if there is no compliance because that is the responsibility of the executive. Minister Moyo’s job is to identify the crosscutting issues in parastatals and craft a policy for presentation to Cabinet and help promote it.
FN: Parastatal boards and chief executive officers argue these salaries are meant to attract qualified personnel. How are you dealing with this thinking?
GM: It is now a dull argument for somebody to say because I’m qualified so I need more. If you are qualified let us see the company deliver. We need service delivery. Is the company paying dividends to Government? If not then there is incompetence. Government is not refusing to pay, but is looking at the performance. State enterprises that are highflying and are cash cows should pay more. The US$5 000 is an average. If the company is performing badly and workers have not been paid, service delivery is poor and you want to get more, then sorry you would rather leave.
Instead of draining the fiscus they should just go. We will look at each parastatal, categorise and evaluate before approving a salary.
FN: Your critics say you are being vindictive and by slashing of salaries you are getting back on parastatal bosses you believe are aligned to Zanu-PF? What is your comment?
GM: I am an Afro optimist; I believe in humanity, I believe that this continent will one day reclaim its rightful place among the committee of nations. I believe that Zimbabwe will regain its status. My beliefs are not compartmentalised into ideological underpinnings. My beliefs are based on Zimbabweaness.
When we are crafting Government policy we are not shallow or myopic. We want Zimbabwe to enter the BRICS countries. In fact we want BRICZS with a Z added to that league of nations.
Government has a clear vision from which our policies are derived. The vision of this country is to construct a developmental democratic state and parastatals are a vital cog in this line. Parastatals have become the engine of many developing countries. Look at China; most of the companies that come to Zimbabwe and the rest of Africa are actually Chinese parastatals.
China has revitalised its state enterprises to compete at home and on the overseas market. We should not hide behind politics. I have no business and no means to know what card they are holding, in fact it’s not me who goes there, but it is their line ministries. That allegation is spurious if not fictitious.
FN: It has almost become a norm to associate non-performance with some parastatals. Minister will some of these enterprises return to profitability and viability, and how?
GM: They will. We need the support of Government in its entirety. We need Zimbabweans to sing from the same book. If we all implement Government policy and apply ourselves towards the restructuring of our parastatals we will do it. What is lacking is the political will, the will to move with urgency to restructure our parastatals.
If there was political will, Zisco would be a big thing in Zimbabwe right now. It would be a parable of virtue for other ministries. I never believe in pessimism, I am optimist. All we need is the right leadership from Government, to boards and chief executives. The 2010 World Cup in South Africa was hinged on three or four parastatals that made sure there was success at the games.
These companies were parastatals, Telkom doing communication, Transnet doing transportation, Eskom with power and electricity. As you know in 2007 Eskom had problems, but it managed to change its mode of operation to focus on provision of power. South Africa has totally changed now. They now have the Gautrain operated by a parastatal. So there is no reason why Zimbabwe should fail because Zimbabwe has the skill and infrastructure critical for its success.
FN: There has been talk about privatisation. What is the Government doing in this regard?
GM: We adopted a policy in 2010 where we identified 10 parastatals that were to be restructured and privatised by the end of that year. It is unfortunate up to now nothing has been done. There are a number of reasons that include  political will, it is not easy to privatise dilapidated companies. We need to dress them up to make them attractive to the suitors and bring them to viability. That process is agonisingly slow. We have restructured Zisco, Noczim and we are working on Zesa, Agribank and POSB.
FN: How far have you gone with a performance based contracts? Are you succeeding?
GM: We have two types of performance contracts. The first is between the line ministry and the board. The boards are required to sign performance contracts with their line ministries and show key result areas. There is also a contract between the board and the chief executive. That was implemented. What are being finalised are those between line ministries and the boards.
The performance contracts are very important. There are issues that the CEOs or boards should do such as providing financials to the auditor general department and holding of annual general meetings. Then we will say according to your target this is what you said you would do, did you do it? It is a kind of dashboard with your red, green or amber. Are you good, lukewarm or useless? We are now able to analyse, evaluate your performance.
FN: There are allegations that ministers are double dipping and getting allowances from State enterprises under their jurisdiction. As responsible minister have you investigated these allegations?
GM: Most of those allegations are emerging out of the requirement to send financial statements to auditor general’s department. The Auditor and Comptroller General department is carrying out its mandate of auditing and once they are finished the report would be made public.
On our part, we are already crafting a policy that would strengthen internal auditors in our parastatals. If they are doing that they are violating the Management of Public Finances Act.