One of the plans by the current Zimbabwean Government has been to privatise government parastatals as a solution to the country’s struggling economy.
According to a document circulating on Social Media platforms the government is likely to privatise utilities, companies and parastatals which include Air Zimbabwe, Forestry Company of Zimbabwe, National Oil Company of Zimbabwe (NOCZIM), National Railways of Zimbabwe (NRZ), Cold Storage Company (CSC), Zimbabwe Electricity Supply Authority (ZESA) Postal and Telecommunications Corporation (PTC) and Chitungwiza Garment Factory.
The document also lists other companies for investment which include CAPS (pvt.) ltd.; Olivine Holdings (Pvt.) Ltd.; Agribank Coorparation; Zimbabwe Reinsurance Coorperation; Finhold; IDC Subsidiaries and ZDC. Privatisation Agency of Zimbabwe has been mandated to lead the process which will see parastatals going into the hands of investors.
Privatisation of government parastatals has always been on the cards as one of the economists Professor Ashok Chakravarti told Zimbabwe Independence in December last year.
“Zimbabwe has 114 parastatals whose capital stock is at US$14 billion, but 99% have been loss-making and relied on Treasury to keep afloat. What needs to be done is to privatise them and only leave a few, around five, which government has to have direct control,” said Chakravarti.
“Government should have direct control of parastatals which deal with roads, mines and energy because these are key economic drivers,”
It was revealed last year in October that 93 State Enterprises had an overall loss of $270 million in 2016.
According to the Daily News the former Zimbabwe President Robert Mugabe’s cabinet had decided to shut down loss-making state parastatals and entreprises. The former President revealed that the parastatals had become a burden on the fiscus instead of contributing to economic development.
“I can reveal you a cabinet secret. We were discussing this subject on Tuesday. I was very negative about it and I could see Minister of Finance (Patrick Chinamasa) getting more and more depressed by my speech which ended by these words ‘they are non- performers, what we must do is to provide coffins for them and bury them with the words Rest in Peace’ “, said Mugabe.
Parastatals have in the past been in storms over corruption allegations, heft salary scandals and also mismanagement of resources.
Zimbabwe’s parastatals have been facing problems with workers going for months without getting salaries. The State enterprises also have debts of millions of US dollars which have since seen one of the Air Zimbabwe planes captured in Britain over unpaid arrears.