eBusiness Weekly
HARARE – The Zimbabwean government said on Thursday it was forging ahead with the long delayed privatisation of over 30 struggling state enterprises that have for long depended on the state for bailout, and expects to complete the exercise in one and half years.
Finance and Economic Development Minister, Mthuli Ncube said in the 2019 national budget, a three pronged approach of privatisation, partial privatisation and liquidation was being used to deal with the problematic institutions.
Government expects to make at least $350 million from the disposal.
“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,” Ncube said.
The reforms are included in the cocktail of solutions targeted at cutting government’s re-current expenditure to focus more on capital investments.
Government has for years been lethargic in reforming the public enterprises, some of which have not only been singled out as badly managed but also engine rooms of corruption.
The firms that have been targeted cut across all sectors of the economy from mining, telecommunications, bank, chemical production, car assembly to glass manufacturing.
At least eight companies, Willowvale Mazda Motor Industries, Surface Investments, Zimbabwe Grain Bag, Chemplex Corporation, Deven Engineering, G&W Minerals, and Ginhole Investments are targeted for privatisation in the next 18 months.
On the partial privatisation list, which can be through listing on the stock exchange or joint venture, are seven firms including telecommunications firms, Tel One, Net One and Telecel, the Post Office Savings Bank as well as Zimpost.
At least 17 mining companies, which are subsidiaries of government’s Zimbabwe Mining Development Corporation, among them Jena, Shabanie, Sanyati and Kamativi are also on this list.
Partial privatisation is expected to take between 12 and 24 months.
Those that the government has found irredeemable and are set to be liquidated are Zimglass, Chitungiwa Garment Factory, Kingstons, Motira and National Glass Industries.
The liquidation process for all the companies is expected to be complete in 12 months.
Ncube said to reduce the financial burden on government, authorities will “refrain from taking over all or part of the debts that these entities have accrued, as not all debt is risky to potential investors.” – New Ziana
