Privatisation to yield $350m

Privatisation to yield $350m
Published: 23 November 2018
THE Government is expected to reap proceeds of up to $350 million in 2019 from the privatisation of key State-owned enterprises (SOEs) and parastatals, the Minister of Finance and Economic Development, Professor Mthuli Ncube, said yesterday.

Among the enterprises earmarked for the privatisation programme are Zimpost, NetOne, TelOne, Telecel and the People's Own Savings Bank (POSB).

Presenting the 2019 National Budget Statement in Parliament, Prof Ncube said Zimpost, TelOne, NetOne, Telecel and POSB would be privatised under a joint venture arrangement.

"Government is going ahead to implement the long delayed parastatal reforms as these institutions ought to play a key role in transforming the economy, among the several drivers we need to embrace. I place it on record that we need to forge ahead with rolling out our parastatal reforms on a roll out template, which categorises the entities under the State-owned enterprises to be partially privatised under joint ventures and listing, State-owned enterprises to be fully privatised and those facing liquidation," said Prof Ncube.

"The 2019 budget assumes proceeds of at least US$350 million being raised from privatisation."

The parastatals earmarked for privatisation have been given timeframes of between 12 to 18 months to conclude privatisation deals. Prof Mthuli Ncube said the privatisation of SOEs was in line with Government's commitment to transform the country's economy. He said the Government would, however, refrain from taking over all or part of the debts that these entities have accrued, adding that not all debts are risky to potential investors.

Prof Ncube is on record as stressing the need to reform the parastatals given the inherent inefficiencies, which saw Government spending $500 million 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 of 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.

Prof Ncube said those that need to be liquidated would go under the hammer, with already three targeted for dissolution, while a further seven State-owned entities would be departmentalised into line ministries.

Some of the parastatals and SOEs earmarked for privatisation include 17 Zimbabwe Mining Development Corporation (ZMDC) subsidiary mines, Road Motor Services (RMS), Infrastructure Development Bank of Zimbabwe, Kingstons, Willowvale Mazda Motor Industry, Zimglass and Zimbabwe Grain Bag.
- chronicle
Tags: Privatisation,


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