The Zimbabwe national budget announced by former finance minister Patrick Chinamasa and the newly appointed Minister Mthuli Ncube have all mentioned the need to partially privatise State Owned Entities, a move meant to save millions from fiscus and breathe fresh air to the sector.
However this has been nothing but cheap talk, as we continue to run out of time amidst dilapidating of once vibrant State Owned enterprises, which have become traditional loss making entities.
The technology sector is seeing its worst years ever due to lack of funding from government as Telecel, TelOne, Zimpost, Post Office, sink in losses while NetOne is significantly increasing revenue.
Telecel Zimbabwe has been declared technically insolvent, yet few years back it was the most promising and fastest growing mobile network.
Big international firms have been courting NetOne for possible buy out as government owns 100% stake. This move has potential to quicken NetOne as a real competitor against well funded giant, Econet.
TelOne is currently facing disconnection over $21 million, a figure government can not bail out with.
These companies at some point used to be very profitable and highly valued, while recently year on year, they are growing into national liabilities, depreciating value even for the next shareholder to offer any significant bid.
Finance and Economic Development Minister Professor Mthuli Ncube told delegates at Chatham House in London where he gave a presentation on the ongoing reforms in Zimbabwe yesterday that Government was serious about privatisation of SOEs.
Minister Ncube said the Government spent half a billion dollars supporting struggling SOEs and parastatals over the last two years, as the perennial loss-making entities continued to drain public funds.
“Think, last year we spent $500 million supporting enterprises that are struggling,” Minister Ncube told the delegates.
The entities used to contribute 40 percent to the economy, but poor management, corruption and weak governance systems have seen them run down with contribution to the economy plummeting to just two percent.
Last year, 38 out of 93 State-owned enterprises audited in 2016 incurred a combined loss of $270 million as weak corporate governance practices and ineffective control mechanisms took their toll.
“We need to move fast, we want to privatise 11 enterprises quickly, I have given some of them six months just to get on with it and six subsidiaries of the Industrial Development Corporation (IDC); also those should be privatised, we are merging 11 (state owned) entities,” said Minister Ncube.
The finance minister said that
“between the next six to nine months, I want to see progress and conclusion of some privatisation deals,” said Minister Ncube.
It is now six months since the minister set his deadline and yet nothing on ground has materialized nor seem to be materialising.
These companies have already signalled an SOS message and government has made it clear that it does not have the capacity to fund them anymore with biting foreign currency shortages, which are ultimately affecting their daily operations .