‘The cry­ba­bies must grow up!’

The Sunday Mail (Zimbabwe) - - BUSINESS - Busi­ness Re­porter

IN­DUS­TRY wants Gov­ern­ment to stop mol­ly­cod­dling State en­ter­prises and paras­tatals (SEPs), say­ing the heavy losses the en­ti­ties post are largely due to gross mis­man­age­ment.

This was one of the sev­eral sub­mis­sions by the Con­fed­er­a­tion of Zim­babwe In­dus­tries and the Zim­babwe Na­tional Cham­ber of Com­merce to­wards the 2018 Na­tional Bud­get.

Finance and Eco­nomic Devel­op­ment Min­is­ter Dr Ig­natius Chombo is ex­pected to present the 2018 Na­tional Bud­get next month.

Of the 107 SEPs, about 85 con­sis­tently post an­nual losses.

Last week, Chief Sec­re­tary to the Pres­i­dent and Cab­i­net Dr Misheck Sibanda said of the 93 SEPs au­dited last year, 38 recorded a com­bined loss of US$270 mil­lion.

Fur­ther, 70 per­cent of the 93 au­dited SEPs were “tech­ni­cally in­sol­vent” or “illiq­uid”.

It is the pat­tern of such grim sta­tis­tics that has prompted in­dus­tri­al­ists to call on Gov­ern­ment to ar­rest to the rot in SEPs.

A po­si­tion pa­per by ZNCC, seen by The Sun­day Mail Busi­ness, reads: “Gov­ern­ment should stop leak­ages in paras­tatals by ad­e­quately sup­port­ing the im­ple­men­ta­tion of the (Au­di­tor-Gen­eral’s) 2014, 2015 and 2016 re­ports rec­om­men­da­tions.”

CZI — Zim­babwe’s big­gest rep­re­sen­ta­tive body for in­dus­try — said it was im­per­a­tive for Gov­ern­ment to pri­va­tise some loss-mak­ing en­ti­ties to re­duce pres­sure on the fis­cus.

“We rec­om­mend that the fo­cus is on the most loss-mak­ing paras­tatals and that we take an ag­gres­sive ap­proach to this to en­sure that we realise quick wins.

“We rec­om­mend im­ple­men­ta­tion of find­ings of stud­ies al­ready done on the var­i­ous paras­tatals. For ex­am­ple, NRZ deal — this has been long over­due and its im­por­tance to in­dus­try can­not be overem­pha­sised.

‘‘Zisco is an­other deal that has taken too long and needs ur­gent at­ten­tion (to­gether with the) Beit­bridge-Chirundu High­way project...”

The re­vival of NRZ and Zisco has gath­ered steam with in­vestors keen to shell out US$1,4 bil­lion for both projects.

The Au­di­tor-Gen­eral’s Of­fice has re­peat­edly pro­duced ad­verse re­ports show­ing how se­nior man­age­ment at SEPs ran down the en­ti­ties and by acts of omis­sion and/or com­mis­sion, over­saw mis­use of re­sources.

The sub­mis­sions by ZNCC and CZI, dove­tail with moves al­ready be­ing spear­headed by the Of­fice of the Pres­i­dent and Cab­i­net af­ter Pres­i­dent Mu­gabe re­cently said some SEPs were can­di­dates for “burial”.

Dr Sibanda last week said the re­sponse to Pres­i­dent Mu­gabe’s di­rec­tive had “been slow” but called upon “rel­e­vant heads of min­istries — to­gether with the re­spec­tive man­age­ment struc­tures” of the en­ti­ties un­der them — to de­vote more time and at­ten­tion to ful­fill­ing the terms of that di­rec­tive”.

Other sub­mis­sions to the 2018 na­tional bud­get in­clude re­duc­ing em­ploy­ment costs; in­tro­duc­ing an eq­ui­table tax sys­tem; re­moval of duty on so­lar bat­ter­ies since pan­els and in­vert­ers don’t pay duty; cash bud­get­ing; and the ini­ti­a­tion of a so­cial con­tract.

Busi­ness and in­dus­try also called for funds to be set aside for im­ple­men­ta­tion of a one-stop-bor­der post at Beit­bridge, and ex­pe­di­tious cap­i­tal­i­sa­tion of the In­dus­trial Devel­op­ment Cor­po­ra­tion to en­able it play a de­vel­op­men­tal role.

The IDC’s man­date is to drive in­dus­tri­al­i­sa­tion but the State in­vest­ment ve­hi­cle oc­ca­sion­ally fo­cuses on man­ag­ing firms like Chemplex Cor­po­ra­tion.

Cab­i­net has since ap­proved pro­pos­als by the In­dus­try and Com­merce Min­istry to trans­form the IDC into an in­dus­trial fi­nancier.

In their sub­mis­sions, in­dus­tri­al­ists said pol­icy con­sis­tency would at­tract in­vestors.

There have been con­cerns over pol­icy dis­cord, which re­port­edly scared po­ten­tial and ex­ist­ing in­vestors, par­tic­u­larly per­tain­ing to the In­di­geni­sa­tion and Eco­nomic Em­pow­er­ment Act.

Said CZI: “The need for pol­icy cer­tainty, con­sis­tency and co­her­ence can never be em­pha­sised enough, and the cre­ation of an en­abling en­vi­ron­ment for busi­ness devel­op­ment is para­mount.

“Based on our 2016 Man­u­fac­tur­ing Sec­tor Sur­vey, most re­spon­dents felt that cur­rently, over and above the in­con­sis­tency, there also were too many re­stric­tive poli­cies and the econ­omy needs ma­jor changes and (a) busi­ness-friendly en­vi­ron­ment.

“There is need to en­sure con­sis­tency and clar­ity of key poli­cies, par­tic­u­larly in­di­geni­sa­tion and other poli­cies.”

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