Monday, May 07, 2012
Monday, 07 May 2012 00:00
Martin Kadzere Senior Business Reporter
MOST State-owned firms are being run by incompetent managers as evidenced by their failure to come up with meaningful restructuring proposals, State Enterprises and Parastatals Minister Gorden Moyo has said.
This has prompted Government to craft a framework that will guide management of State-owned entities on their restructuring plans. In June 2010, Government approved the restructuring of 10 entities but most of these failed to produce restrucuturing plans.
Notable progress has only been made on the sale of the Zimbabwe Iron and Steel Company’s 54 percent stake to Indian firm Essar Global and the unbundling into two companies of the National Oil Company of Zimbabwe.
“Some did not even know where to start due to lack of expertise and this has slowed the restructuring of State enterprises to the point of frustration,” Minister Moyo said in an interview last Friday.
“The restructuring manual will be launched next week and it will contain ‘verses and chapters’ that should be followed by State entities.”
Minister Moyo could not reveal the names of the firms that presented sub-standard documents.
Zimbabwe has 78 State enterprises with capacity to contribute 40 percent to the Gross Domestic Product but most of them have been underperforming due to excessive debts and mismanagement.
Arufin Capital managing director Mr Knowledge Hofisi said State enterprises were affected by lack of competent managerial and technical workforce after the country suffered brain drain between 2000 and 2008, a period characterised by economic crisis.
“We no longer have adequate skills to craft pathfinder documents that articulate real issues affecting companies . . . it then becomes difficult to bring in investors,” said Mr Hofisi whose company is involved in raising capital and turning around distressed companies.
The underperformance of State firms has led to poor service delivery in various sectors including transport, water and electricity.
Air Zimbabwe, which is 100 percent owned by the Government, suspended flights in January after a strike by pilots to press for outstanding salaries.
The national airline, saddled with a US$140 million debt, resumed domestic flights last week but regional and international flights remain suspended.
Minister Moyo said his ministry was planning a restructuring summit, which would bring together directors of all State enterprises, their boards, line ministries and experts from various sectors.
He said issues to be discussed include how to deal with inter-parastatal debt.
Minister Moyo said the inter-parastatal debt involving Government departments and ministries stood at US$458,6 million as at September 31, 2011.
Of this figure, cross areas for State firms stood at US$240,2 million.
Inter-parastatal debt for the 10 entities prioritised for restructuring was US$32,6 million.
“Inter-parastatal debt remains one of the most serious challenges affecting the cashflows of most of the State enterprises to the detriment of economic recovery efforts initiated by Government,” said the minister.