‘SHUT DOWN LOSS MAKERS’ President advocates closure of non-performing parastatals
PRESIDENT Mugabe yesterday said nonperforming parastatals and State enterprises must be dissolved as they are stifling economic growth through perennial dependence on the fiscus.
He said some ailing parastatals deserved to be “buried in coffins” as they were grappling with high overheads and under-capitalisation coupled with corruption and lack of good corporate governance.
President Mugabe made the remarks while addressing captains of industry at State House in Harare yesterday. “I can reveal to you a Cabinet secret,” he said. “We were discussing this subject on Tuesday. I was very negative about it and I could see the Minister of Finance (Patrick Chinamasa) getting more and more depressed by my speech which ended by stating that what we must do to these non-performers is to find coffins for them and bury them with the words Rest in Peace.
“I said Minister of Finance, well you can go your own way. Then they said there are certain ones, very important ones, I agree that they should be kept, but PRESIDENT Mugabe yesterday held a historic interface meeting with the private sector to exchange views on the economic turnaround process and map the way forward.
The meeting, held at State House in Harare, was initiated by the captains of industry and is in line with the ZimAsset and the 10-Point Plan, which stress the need for close collaboration between
the others we should get as many coffins as there are those which have caused us immense expenditure. They should certainly go.”
The private sector had earlier on told the President that it would be better if some parastatals and State owned enterprises were privatised.
President Mugabe said the State enterprises and parastatals sector had the potential to contribute 40 percent to the country’s Gross Domestic Product (GDP). Government and the private sector. A similar meeting was last held in 2007. Yesterday’s indaba was attended by representatives from business associations such as the Confederation of Zimbabwe Industries (CZI), Bankers’ Association of Zimbabwe (BAZ), Chamber of Mines of Zimbabwe (CoMZ), Zimbabwe Farmers’ Union (ZFU), Zimbabwe National Chamber of Commerce (ZNCC), Agricultural and Rural Development Authority (ARDA) and Zimbabwe Council of Tourism.
The contribution at the moment is around 12 percent.
Said President Mugabe: “We certainly share your concerns over underperformance of the State Enterprises and Parastatals sector. The enactment of the Public Entities Corporate Governance Act, which is before Parliament, is expected to help transform the fortunes of the sector through enhancing the entities’ compliance with sound corporate governance practices.”
President Mugabe said Zimbabwe had borrowed “these awful money spenders and awful burdens around our necks” from Britain.
He then chronicled how former British Prime Minister Margaret Thatcher undertook a privatisation drive and improved her country’s economy in the 1980s.
“So the Conservative Party sang a song of great expenditure, lack of accountability and lack of controls and the next election, Labour Party lost to Conservatives,” he said.
“There was improvement, the economy of Britain started looking up. Margaret Thatcher had succeeded, I am not sure whether (Ronald) Reagan succeeded on the American front. So I say to my people, we also pride, we built lots of parastatals and companies which are as good as parastatals that look after themselves in the name of State companies and you will have one person like (Mike) Ndudzo running the whole of Industrial Development Corporation (IDC) which is a multifaceted company. How do you expect (him to manage) even given that he is a sincere man, well trained and recently they wanted to make him auditor in charge of Government expenditure and Parliament rejected.”
Cabinet Ministers and Reserve Bank of Zimbabwe Governor Dr John Mangudya were also present, as both parties sought ways of improving the economy.
In his remarks, President Mugabe said cooperation between Government and the private sector had brought success stories in the economy.
“Such cooperation is largely responsible for the phenomenal success of the Command Agriculture Production Programme, which in a single season, has enabled Zimbabwe to regain its food security,” he said.
“The private sector is thus enjoined to support the expanded version of the Command Agriculture programme by, inter alia, ensuring the timeous supply of critical inputs such as seed, fertilisers and chemicals at affordable prices.”
President Mugabe said to bridge the existing infrastructure gap, Government would continue prioritising the implementation of infrastructure development projects covering transport, energy, water and housing.
In the transport sector, he said, Transport and Infrastructural Development Minister Dr Joram Gumbo “was not sleeping as he was always updating him” on progress made on various projects.
“Work is under way to ensure the recently launched Beitbridge-Masvingo-Harare-Chirundu dualisation programme, is completed within the shortest possible time frame,” said President Mugabe.
“At the same time, plans for the expansion of the HarareNyamapanda and the Beitbridge-Bulawayo-Victoria Falls roads are also under active consideration. Government is also rehabilitating urban and rural infrastructure damaged by the recent floods.
“The commissioning of the Victoria Falls, Joshua Mqabuko International airports had already triggered an upsurge in inbound tourist arrivals. Focus is now on expansion of Harare International Airport.”
In the energy sector, President Mugabe said: “Work is under way to complete the Kariba South project and commence construction of Hwange 7 and 8 projects.
“Domestic power generation will also be augmented through the incorporation of independent power producers, focusing on hydro and solar energy. Such programmes should eventually result in the reduction of local power generation deficit and cost of power.”