eBusiness Weekly
HARARE –The Zimbabwe government must take a bold step and commercialise all state enterprises and restrict itself to providing an enabling environment for business to prosper, an economist said on Tuesday.
The government recently said it was in the process of rationalizing its over 90 state enterprises and was targeting to have some privatised while keeping those it deemed strategic under its control.
Ministries that have state enterprises under them have been asked to produce turnaround programmes for them.
The government linked and owned businesses have been criticized for their poor service delivery and are riddled with corruption due to poor corporate governance that has seen most failing to break even and depending on bailouts from a cash strapped Treasury to remain in operation.
Investors have however been invited to indicate their interests in some of the parastatals and state owned enterprises for the offers to be considered.
But government adviser and economic commentator, Professor Ashok Chakravati told delegates at a Confederation of Zimbabwe Industries (CZI) economic outlook symposium that the government should let go of all state enterprises.
“Outright commercialization and joint ventures is the answer not this restructuring of parastatals” he said.
Chakravati said companies under the government owned Industrial Development Corporation (IDC) must all be sold and the funds used to incubate other companies. The IDC owns over 20 companies in different sectors of the economy.
“The state must not be involved in production but must create a conducive environment for business to prosper,” said Chakravati. Producing turn around strategies for the parastatals was not the answer to addressing the issue of problematic government owned businesses, he said.
Economist James Wadi, who was non-committal on what exactly the government should do, said the parastatals would only make a positive contribution to the economy and government coffers if they were run properly.
“What is problematic about our enterprises is the way they have been run. If they are profitable, they would have contributed to government revenue,” he said.
In its defence, the government has argued that parastatals, like the power utility, Zesa Holdings, should not be privatised since they provided critical services that should at all times be kept in check to ensure that they remained affordable to the general citizenry. – New Ziana
