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Oliver Kazunga Business Reporter
TREASURY has released slightly above $20 million towards off-setting the more than $1,5 billion inter-parastatal debt, State Enterprises and Parastatals Minister, Gorden Moyo has said. Inter-parastatal debt refers to loans, trade credits, and other inter-company account payables and receivables between public entities.
He said the $20 million that had been released was a drop in the ocean as Government prioritised other projects such as sourcing funds for the harmonised elections.
Last week, the Constitutional Court confirmed 31 July as the date for this year’s general elections.
“Something has been done with regards to off-setting the statutory debt that is Pay As You Earn and National Social Security Authority.
“Slightly above $20 million has been released and the funds are just a drop in the ocean because Government is looking for resources to fund general elections,” said Minister Moyo.
In 2012, Government established an inter-parastatals debt strategy to allow entities to clear their debt to each other.
Due to a rapid accumulation of cross arrears in the past, there has been an interlocking chain of debts among public enterprises.
This has generated negative spill-over effects in the whole economy.
The inter-parastatals cross arrears has a multiplier effect that spreads through out the economy.
Minister Moyo said it was important to reduce the inter-parastatal debt to improve operational efficiency of public entities.
“Once elections are over and whatever Government comes into power will have to make sure that the balance sheets of our parastatals are clean to improve the performance of the entities,” said Minister Moyo.
Gross mismanagement, corruption and lack of good corporate governance has seen some of the country’s 78 State enterprises milking the Government instead of contributing to national economic development.
Online Reporter