Decisive action needed on parastatals
It is incumbent upon the powers that be to move with haste in dealing with the ailing parastatals. Zimbabwe has skilled turnaround strategists who can easily identify those that can be salvaged and those that need to be taken off Government books.
IT was Jack Welch, former chairman and chief executive of General Electric who said: “When the rate of change outside exceeds the rate inside, then the end is in sight”.
This holds true where loss-making parastatals in our economy are concerned.
Many have since “died” while others are in comatose or on life support.
They have remained a major ulcer and big hindrance to progress in the economy.
Many have failed to move with the times in this rapidly transforming global business environment while others have tried to adjust, albeit at a very slow pace.
In most instances, disposal has emerged as the best possible option, while in others, commercialisation and privatisation would work, among other strategies.
In our business section, we carry a story on efforts being made to dispose of loss-making parastatals.
Many would agree with me that this is not news at all.
For the most part of my 29-year journalism career, we have written hard news, features, analyses and opinions on the ailing parastatals, but the story remains almost the same.
Not much progress has been registered except for a few cases where decisions have been made.
This, in part, reflects the complex nature of the process, but more progress needs to be made lest these institutions continue to fall into the abyss.
The economy can ill-afford the heavy burden that they have become over the last few years. This is also not a new revelation at all.
Let us look at the figures and those do not lie.
They used to contribute 40 percent to GDP, now Treasury estimates it to be less than 2 percent.
At least 38 of 93 public entities were found to be incurring losses, according to the Auditor-General.
There has always been a need to privatise,commercialise and re-bundle.
In our story this week, the Ministry of Finance argues that we cannot sell low, but that we should resuscitate the parastatals before disposal.
This sounds reasonable and even logical at face value but we need to do what we have to. At times, it is better to cut the losses before more harm is done.
Finance and Economic Development Minister Professor Mthuli Ncube promised four years ago that parastatals and Stateowned enterprises would be disposed of but this is yet to happen.
Parastatals and State-owned enterprises haemorrhage State resources yet most of
them are designed to provide relief or alternatively provide a cushioning service.
We have grave issues in most of them. These include:l lack of capital l an escalating wage bill l low productivity l unsustainable debts l corruption l mismanagement
We need to expedite the process to curb the drain. We have finite resources and we can not afford further delays.
There are voluminous documents, summaries and abstracts on the process already, so we need to get on with the job. Of course, it is easier said, but we need to implement the agreed positions.
Let me go to why most enterprises fail. What are the issues that affect parastatal performance?
It starts with boards, their composition,
performance monitoring mechanism and risk of interests.
I can also add corporate culture and management.
They should not sleep on their jobs. After all,they should be on point,interrogating all issues that fall under their purview Prof Ncube probably has a thankless job. No matter how hard he works, he gets pot-shots from all over.
In simple economics, cost benefit analysis, low-hanging fruits, stopping the haemorrhage and augmenting revenue streams, his work is cut out.
There we submit that he expeditiously cuts the drain on the fiscus by the parastatals.
Privatise, commercialise or dispose as the situation best fits.
Arguments put forward such as lack of resources are rather open to interrogation.
Any entity, corporate or public, is accountable to the people it is supposed to serve. This is a given.
Parastatals and State-owned enterprises have a fiduciary role to fulfil.
But then again, only if they serve the purpose for which they were created.
It is incumbent upon the powers that be to move with haste in dealing with the ailing parastatals.
Zimbabwe has skilled turnaround strategists who can easily identify those that can be salvaged and those that need to be taken off Government books.
They can be hired to do just that, so we can make progress. Of course, a parent always takes remedial action to save the situation for their child.
The Government, as the parent, needs, in this instance, to address the obtaining situation.
Let the best strategy carry the day as we move towards realising Vision 2030. In God I Trust!
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