Manual for parastatals restructuring launched
Monday, 28 May 2012 00:00
Martin Kadzere Senior Business Reporter
GOVERNMENT has launched a manual that guides implementation of restructuring of State enterprises and parastatals. The manual would provide various stakeholders with information on the process and basis on which the implementation of the
programme could be assessed as well as give investors the needed confidence to do business with Government.
It will also be used as a key technical reference in the restructuring process with a view to implement the programme through international best practices.
In a speech read on his behalf on Wednesday, State Enterprises and Parastatal Minister Gorden Moyo said the manual would be used as a guide and as a substitute to the commercial and other pieces of legislation that have an impact on the SEP reform process.
“It is evident that importance of restructuring of SEPs to the economic development and growth can never be over emphasised but the most important issue is actually the way how it’s done,” said Minister Moyo.
“In that regard, the absence of a transparent and clearly defined roadmap can hamstring the restructuring of SEPs notwithstanding the apparent political will to do so.”
Zimbabwe has 78 SEPs with potential to contribute 40 percent to the gross domestic product but most of them have been operating below capacity due to the inter-parastatal debt at about US$1,5 billion, undercapitalisation and shortage of skilled labour.
In 2010, Government approved the restructuring of SEPs but the progress has been slow. Notable progress has been on the sale of Government’s 56 percent stake in Zimbabwe Iron and Steel Company, now NewZim Steel to Indian firm, Essar Holdings.
Minister Moyo said his ministry would draft State Enterprises Restructuring Agency Bill that would compel transparency and discipline in the SEPs restructuring process.
“These envisaged Acts shall also speed up the restructuring process for the economy to enjoy full benefits of restructuring by reducing restructuring-lag losses among other encumbrances,” said Minister Moyo.
The objective of SEP restructuring include, among others, promoting economic efficiency, reducing financial burden of loss-making SEPs thereby releasing limited state resources for financing other demands and to spread share ownership.
For Zimbabwe, the restructuring of SEPs is seen as a crucial step towards enhancing the contribution of SEPs to economic growth through efficient service provision to other industries along the value chain.
It can also reduce the burden on the already fiscal constrained government, hence freeing some financial resources for other growth-enhancing capital projects.
Furthermore, it helps to attract new investment particularly foreign investment, new technology and management skills.