Online Reporter
Michael Tome
Business Reporter
THE Ministry of Finance, Economic Development and Investment Promotion has pledged to clear all debts owed to state-owned enterprises (SOEs) to support their liquidity and working capital positions.
The Treasury has developed a comprehensive strategy to settle the SOE debts, with support from the World Bank, which has provided the consultancy to ensure the success of the initiative.
Addressing stakeholders at the TelOne annual general meeting on Monday, the principal accountant in the ministry, Ms Portia Hamadziripi, said Treasury had come up with a debt management strategy to contain the ballooning debt to Government ministries and SOEs.
As part of the debt clearance strategy, the ministry has arranged for all line ministries and SOEs, including companies like NetOne and Zesa, to submit their debt stock.
This will enable the ministry to assess the debts holistically, rather than on a case-by-case basis, allowing for a more coordinated approach to debt management.
Despite the magnitude of the debts, the Treasury has committed to providing the requisite funding to improve the liquidity positions of the SOEs and ensure they operate effectively.
The Government owes a substantial amount to the SOEs, which account for a significant portion of the country’s overall debt.
However, this proactive approach by the Government is meant to alleviate the financial strain on public entities and promote economic stability.
“In terms of the debts that we owe to TelOne and other SOEs, we came up with an arrears stock clearance strategy that we are working on together with the World Bank, which has already given us a consultant to work with. According to the framework, all the ministries and SOEs will submit their stock of arrears, so that we are able to see the debts that we have in a holistic approach, not on a case-by-case basis.
“We had a workshop where all the SOEs and the ministries presented their stock of arrears. The numbers are quite huge. We have also incorporated the use of auditors so that line ministries and SOEs give us a clear report on the exact amount of money that we owe instead of just paying,” said Ms Hamadziripi.
She indicated that the Government would ensure SOEs and line ministries’ debt clearance despite the prevailing tight revenue inflows.
