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State-owned enterprises have had a dubious record, not just in Zimbabwe, but in many parts of the world, when it comes to efficiency, profit making and managerial practices and any that need to be retained should perhaps be renamed State-owned businesses, so they develop a business culture.

The basic problems were outlined by President Mnangagwa on Wednesday when he received a $15 million dividend payment from the Industrial Development Corporation of Zimbabwe, its first for 12 years and a sign that this particular enterprise is starting to straighten itself out.

The President, while praising progress, still wants to see a lot more, even from that enterprise.

The mess inherited by the Second Republic contains a wide assortment of problems across a large swathe of the State-owned sectors, some resulting from bad Government policies now being fixed, and many in those enterprises themselves.

This results in enterprises wanting “capital injections”. Some of these are easily justified. But there is a difference between, for example, Zesa wanting a capital injection to help fund a new power station and an enterprise that is certainly not growing and might even be contracting wanting more capital because it wasted what it started with.

We are now moving into what the President described as handouts, that this an enterprise faced with a gap between what it spends and what it gets in revenue wanting that gap filled by the Treasury.

Other unpleasant practices to fund these gaps come from not making some payments. So rates and levies are unpaid, tax collections like PAYE and VAT are not remitted, the modest pair of payments for workers compensation and basic pension fund contributions are not sent to NSSA. Even Zesa bills are left unpaid.

The list goes on. Behind it is an assumption that because an entity is owned by the State it should be treated differently and does not have to pay its way, and under the old dispensation it was often allowed to do this.

Coupled with this is in a fair number of cases extraordinary managerial inefficiency along with “nepotism and opaque personal management” that leads to the wrong people being hired and all too often too many people being hired.

Sometimes these combine with the wrong people being kept on while a nucleus of competents are added to the payroll simply to keep the enterprise sort of functioning.

Air Zimbabwe was a prime example, and in the end a judicial manager was called in to sort everything out, and apparently he did a good job and what is now there is at least a potentially viable airline business that might need recapitalisation, but will spend capital on aeroplanes, not on a padded payroll of the semi-efficient or even the totally useless.

Among the many reforms of the Second Republic has been the introduction of performance contracts for the heads of parastatals and State-owned enterprises.

The President was pleasant when he made these happen, but behind them is now definitely the new policy that those who do not perform will be replaced by someone who can.

This is largely what boards of directors of private companies demand from their managers. They will go to a lot of trouble to hire the right people at the top level and set out very carefully and precisely what they expect.

Managers on this sort of contract are careful who they hire lower down the ladder, since they need someone who can do the job and so preserve the manager’s job by ensuring that the business functions profitably and properly.

The other area where the private sector shines is demanding regular reports and regular audits. Owners like to know exactly what is going on and like to know about any deviation while it is still small and easy to correct. They also want honesty, but this sort of regular and timeous reporting is still needed in a corruption-free environment.

The President noted that some parastatals and enterprises are not compliant with the basic rules of reporting, even if Parliament itself has laid them down.

Some are now registered companies, and the Companies Act lays down a set of basic requirements that a private concern has to meet to keep itself on the lists maintained by the registrar of companies.

One reason for converting parastatals to companies was to ensure that the Companies Act rules were followed.

President Mnangagwa was explicit that he does not want to hear about delayed statutory reports, or delayed statutory payments.

He just wants the reports in his hands or the hands of the relevant ministries in full and on time, and wants the payments required by law made in full by the deadlines. Or else.

We have seen this in service parastatals. Tax collector Zimra had a shake-up at the top to ensure it collects everything authorised by Parliament with a very low percentage target to cover collection and enforcement.

Zinara, after wayward spending, suddenly bumped into the Second Republic and saw a brand new board and brand new management, and is now providing the required cash for the road network.

Even something like the GMB which is more than a State grain trader, being responsible for distributing the inputs in Government schemes and buying and storing the resulting grain, needs to keep crystal clear and up-to-date accounts so that everyone knows, instantly, what expenses are for the Government account and what come from trading revenue.

Such accounts will also pinpoint managerial slackness and the other ills that President Mnangagwa pinpointed.

Basically just because an entity is in the State sector does not mean it has some sort of exemption from proper business rules and practices. The taxpayer is not Father Christmas and does not want to pay for inefficiency and worse.

There is nothing inherently wrong with State ownership so long as the sort of management and accounting demanded by the market place in the private sector are followed.

And the President made it clear he does not want to hear more excuses, just sound management and a regular flow of dividends coming from the profits.