eBusiness Weekly
Oliver Kazunga
Economic commentators have expressed mixed views over how political influence on State enterprises and parastatals is affecting the performance of the entities in service delivery and contribution to Zimbabwe’s Gross Domestic Product (GDP).
Zimbabwe has over 100 State enterprises and parastatals.
By virtue of being State-owned they should at least contribute 40 percent to the GDP.
However, most of Zimbabwe’s State-owned entities and parastatals were underperforming, contributing less than 10 percent to the GDP from about 40 percent in the 1990s.
This is largely attributable to issues around accountability and transparency engendered to some extent by lack of autonomy from political interference.
The State Enterprises Reform, Corporate Governance Unit and Procurement in the Office of the President and Cabinet has identified performance of public entities as an area that requires refocus for the country to realise national aspirations and Vision 2030.
Former Minister of State Enterprises and Parastatals in the inclusive Government, Dr Gorden Moyo, told this paper that the country’s Corporate Governance is conspicuous about how public utilities should be governed in order to improve their operational efficiency.
“The Corporate Governance of the Republic of Zimbabwe that we did in 2010 was very clear and the corporate governance principles that are contained in the Public Entities Act of 2018 are also clear that the boards of State enterprises and parastatals must be professional.
“The word ‘professional’ itself is enough to explain to you that you can’t have political players, partisan political players running public entities.
“We need professional people with expertise and experience to turn around the State enterprises.
“So, I am in agreement with the Corporate Governance Framework of 2010, which we did, I am in agreement with the Public Entities Act of 2018.
“Politicians should go to their rallies and leave public entities to do service delivery to the people of Zimbabwe,” he said.
He said the appointment of politicians or their cronies into parastatal boards was negatively affecting professionalism in public utilities.
The appointment of politicians into these parastatal boards is really affecting the performance of these entities.
“At the same time if you have power over a parastatal and you have a programme that you are running in your political party, for example, in the case of Zupco, you take the buses to carry your people to a political rally or programme, yet those Zupco buses are supposed to be doing their work ensuring there is public transport for everyone,” he said.
Economist, Brains Muchemwa, said it is naturally difficult to separate political influence in the running of parastatals as the boards are appointed by Government ministers.
“However, allowing the relevant parliamentary committees to interview and appoint board members of parastatals would mostly minimise political interference and bootlicking,” he said.
Political Actors Dialogue economic committee chairman, Trust Chikohora, said it was imperative for State enterprises and parastatals to operate within the confines of good corporate governance.
He said the National Code on Corporate Governance for Zimbabwe, spells out that the composition of the boards should be balanced in terms of gender equality and composition of skills.
“Parastatals are important in the economy of this country so it is imperative that there should be good corporate governance in that sector in accordance with the State Enterprises and Public Entities Act as derived from the National Code on Corporate Governance for Zimbabwe.
“So, when you look at those best practices like in the code for corporate governance, it says that the board should be balanced; it should have all the skills mixed that is required to run that specific enterprise.
“That means essential skills such as lawyers, accountants and human resources practitioners need to be on the board.
“You also need to have gender balance, which means men and women as well as the youth in terms of the good age distribution. Youth and those that are more experienced, a blend of that is required to have an effective board,” said Chikohora.
Over and above that, he said the boards should be professional and put the interest of the entity that they are running first as well as the interest of all the stakeholders involved so that the entities are sustainable for the benefit of the county.
A corporate rescue practitioner, Dr Cecil Madondo, said focus should be on the characters of individual board members of the parastatals looking at their leadership qualities rather than political affiliation.
“We must be focused on the characters of the leaders, do they have leadership qualities, do they have good character and are they able to deliver to the stakeholders and at the end of the day their political affiliation is not a major issue. We need ethical leadership that can deliver to stakeholders.
“I measure the effectiveness of a leader by results, if there are no results, they must go quickly. They must be given a time frame to achieve specific achievable goals and if they don’t achieve they must be removed quickly in the interest of the public.”
He said the country needs to do research based on empirical evidence as to why State enterprises were underperforming.
“We need to do some research and understand the reasons why some of the parastatals are underperforming. The other reasons could be lack of capital because we need to recapitalise to attract investment,” said Dr Madondo.
