Zimbabwe in big parastatals sell-off

Zimbabwe has invited bids to buy stakes in up to eight parastatals, including telecomms firms, Air Zimbabwe, Zesa Holdings and the National Railways of Zimbabwe and is selling off its shareholdings in other private firms in a bid to plug its ballooning budget deficit.

The Deputy Minister of Finance and Economic Planning, Terence Mukupe said that government is willing to totally divest from some entities.

“Yes, privatisation of parastatals is ongoing as it was mentioned in the budget. SERA (State Enterprises Restructuring Agency) is selling off some companies,” said Mukupe.

In the 2018 National Budget, Finance Minister Patrick Chinamasa said that government will shut down technically insolvent enterprises.

“There is a lot more that is going on, we are diluting our shareholding in those entities and our shareholding might go to zero percent in some entities,” added Mukupe.

The southern African country has 92 SOE or parastatals, most of which have been making losses for years due to mismanagement, high operating costs and old equipment.

 In 2016, 38 parastatals ran losses totalling $270 million according to a report released by the Office of the President and Cabinet last October.

So far government has published a priority list of companies including Air Zimbabwe, National Railways of Zimbabwe (NRZ), Cold Storage Company (CSC), Zimbabwe Electricity Supply Authority (ZESA), Posts and Telecommunication Corporation (Netone, Telone and Zimpost and POSB Bank), Finhold (ZB Holdings), Industrial Development Corporation of Zimbabwe (IDCZ) subsidiaries, Olivine Holdings, Agribank, CAPS, ZDC subsidiary among others.

Government spending ballooned under former president Robert Mugabe, with more than 90 percent of the budget going on civil servant salaries, leaving precious little for the investment needed to boost growth.

The new government of Emmerson Mnangagwa has promised to slash spending by selling off or privatising its loss making companies.

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