Petrotrade, Genesis merger conclusion by June
Senior Business Reporter
The Government expects to conclude the merger between Petrotrade and Genesis Energy in the first half of 2024, as part of efforts to restructure state-owned enterprises and avoid duplication of costs.
In 2019, the Government approved the merger of the two entities to form a single entity that would be partially privatised more efficient and profitable.
In August 2022, the Government announced Kuwaiti commodities trader Independent Petroleum Group (IPG) as its preferred suitor for a stake in Petrotrade.
The Kuwait company has been a major supplier of fuel to Zimbabwe, and Petrotrade operates 30 service stations of its own and others through dealers.
The completion of the merger will facilitate the conclusion of the IPG purchase transaction, which fulfils the Government’s objective of merging Petrotrade and Genesis Energy at the lowest restructuring cost.
Finance, Economic Development, and Investment Promotion Minister Professor Mthuli Ncube said in the 2024 National Budget Statement presented last week that the Government was committed to the merger of institutions offering related services to avoid costly duplications and management overload.
“The merger of Petrotrade and Genesis Energy is expected to be concluded in the first half of 2024,” he said.
Minister Ncube said to improve good corporate practices in public entities, the Public Entities Corporate Governance Act will be strengthened by reviewing some of its provisions in line with best practices.
He added that the Government was determined to not only ensure that it starts getting a return from its investments, but also that State enterprises create employment and contribute positively to the growth and development of the economy.
As part of the State enterprises reform agenda, the Government is addressing the conflict of interest that arose from line ministries exercising both ownership and regulatory functions, which undermined progress on the implementation of critical reforms required to improve performance.
Minister Ncube said conflict of interest was also undermining the achievement of the national vision and objectives of the Mutapa Investment Fund.
The fund is mandated through its enabling Act to undertake secure investments for the benefit and enjoyment of future generations in Zimbabwe, support the development objectives of the Government, contribute towards fiscal or macroeconomic stabilisation, and contribute to the revenues of the Government of Zimbabwe from the net returns on its investments.
The Mutapa Investment Fund is wholly owned by the Government, and to drive the operationalisation of the fund, board members were appointed on November 6, 2023, under a governance structure that is based on meritocracy.
In line with its objectives, the board and management of the fund are mandated to demand and implement turnaround strategies from the various companies it now owns, ensure robust investment policies, and ensure key performance targets are implemented, monitored, and evaluated.
“Furthermore, the fund will enforce adherence by the companies to good corporate governance guidelines applicable to publicly listed companies.
“The fund will, therefore, be expected to implement measures that will strengthen the targeted parastatals’ governance frameworks and ensure disciplined application of the entities’ resources to meet national targets,” the Minister said.
The companies under the Fund will continue to be governed by the national public procurement laws and value-for-money principles, and line ministries will continue to exercise their regulatory functions in line with their mandate.
Minister Ncube said that for other state enterprises, the Government will continue to implement the reforms approved by Cabinet outside the portfolio of the Mutapa Investment Fund.