Government will carry out due diligence audits for 15 out of the 91 state-owned enterprises and parastatals as treasury seeks to reform the largely loss-making entities that continue to drain the fiscus, Finance Minister Patrick Chinamasa said today.
State enterprises, which once made up 60 percent of the economy, have been struggling mainly due to mismanagement and corruption, raking up perennial losses and relying almost entirely on financial support from treasury.
Chinamasa told a media briefing that treasury would allocate part of the $110 million grant extended by the African Development Bank to fund energy projects, water and sanitation; agriculture, financial sector reforms; governance and institutional reforms and social projects.
“As you know there are 91 parastatals and 91 local authorities. We cannot do all of them at once, so I am going to isolate maybe 10 to 15 key strategic parastatals and commence due diligence audits so that we determine and have information as to what is obtaining there and it is on the basis of those due diligence reports that we will be able to carry out any reform measures,” Chinamasa said.
“So there is an imperative need…so that we are informed not just whether people are stealing money or not but we are informed as to the presence or absence of management systems within those parastatals, that we’re also further informed about the management capacities in those parastatals. I am going to devote some resources towards that effort.”
He did not name the parastatals, but some of the key state-owned entities that have been bleeding treasury include national carrier Air Zimbabwe, National Railways of Zimbabwe, Grain Marketing Board, Cold Storage Company, Central Mechanical and Equipment Department, Civil Aviation Authority of Zimbabwe and Zimbabwe National Road Administration.
Chinamasa admitted that limited fiscal space resulting from an unsustainable wage bill, which takes up more than 70 percent of total state expenditure, has crowded out capital projects making the country an unattractive and costly investment destination.
The finance minister said out of the AfDB grant, $35.6 million would go towards the multinational Kariba Dam rehabilitation project; $16.9 million towards the rehabilitation of Alaska-Karoi electricity transmission project, $39 million for water supply and sanitation and $7.6 million for governance reforms.- The Source