5 key issues Zimbabwe Finance Minister Chinamasa should address tomorrow

4-Parastatal reform

The reform of Zimbabwe’s 91 state-owned companies — most of which are underperforming — has been on the agenda for a long time but, in Chinamasa’s own words, government did not have “the energy or the resources.”

At their peak, state enterprises contributed up to 40 percent of the country’s gross domestic product (GDP), but they have been dragged down by legacy debt, corruption and mismanagement.

But worryingly, the government has been preying on the few of these enterprises that are cash-rich. Broke and unable to fund its operations, government is allowing line ministries to raid parastatals under their care for money.

Across government, parastatals last year forked out at least $12 million dollars to fund Ministries that were failing to get money from Treasury for operations. None of the payments were authorised by Treasury.

The case at the Ministry of ICT, Posts and Courier Services reflects the extent of the crisis. The ministry used money from the Posts and Telecommunications Regulation Authority of Zimbabwe (POTRAZ) and state owned mobile firm NetOne to buy condition of service vehicles for Minister Supa Mandiwanzira and his deputy Win Mlambo with approval from the Office of the President and Cabinet (OPC) but without the nod from the Ministry of Finance.

In April, Chinamasa said government had targeted 10 parastatals for priority restructuring. They include Air Zimbabwe, Cold Storage Commission (CSC), Civil Aviation Authority, National Railways of Zimbabwe (NRZ), Agricultural and Rural Development Authority (ARDA) and the Grain Marketing Board (GMB).

But questions remain whether government is sincere about its promise to reform public enterprises, when it is itself leeching off the same struggling companies. Arising from this is also the question of government expenditure — which evidently runs into millions of dollars -– hidden in the accounts of the parastatals.

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