Kudakwashe Mhundwa Business Reporter
State-owned petroleum dealer, Petrotrade says it is in the process of securing a strategic partner that will help grow the company`s local footprint, as the state entity moves towards achieving Government’s partial privatisation strategy.
The move falls under Government`s plans to restructure State-owned enterprises (SOEs), within which 41 entities are lined-up for privatisation, departmentalisation and listing on the Zimbabwe Stock Exchange.
Other firms would be commercialised, merged while four will be guillotined. It is expected that 13 parastatals would be privatised while 12 are set for ZSE listing.
The restructuring, which targets to turn SOEs into profitable firms to avoid reliance on Government handouts for survival, is being done as part of efforts to achieve “Vision 2030”.
In an interview with The Herald Business Petrotrade acting chief executive officer Godfrey Ncube said the fuel dealer was at the stage of securing a transactional advisor that will be responsible for advising on the finer details of project selection.
“As you may know Petrotrade is one of the companies that is earmarked for partial privatisation by the Government, we are actually in the process of trying to secure a strategic partner, we are at a stage of selecting a transactional advisor that will guide us on how to procure or get the services for the strategic partner, this is an ongoing process and we are in the middle of it.
“In regards to the completion of privatisation, there are too many protocols that are supposed to be respected in the process we had set 2020 (the end of 2019 or beginning of 2020) as the final target and we hope we can achieve that because the quicker we do that the better for us because we are looking at a strategic partner who can bring fuel into Zimbabwe and solve some of the problems we are facing as a country,” said Mr Ncube.
He highlighted that though the final decision of the partner does not lie solely on the state enterprise they are gearing for an international partner who has efficient capacity and know how in the energy sector.
“From a Petrotrade point of view, we prefer a partner who has a know-how of the fuel industry so that we can gain in terms of the technology and the know-how and it will be better if that is an international partner but at the end of the day it is not up to Petrotrade but the shareholder will decide what kind of partner we are going to have,” he said.
According to Finance and Economic Development Minister Mthuli Ncube, Government was spending about 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.
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.
A total 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.