Patrick Chinamasa Correct on possible shutting down of Parastatals

The call by the Finance Minister, Patrick Chinamasa, to dump no-performing parastatals as an unnecessary burden to the Government is a prudent idea which can save the fiscus. Most of these entities have become a nuisance to government as they demand funding from the treasury incessantly instead of contributing to the national coffers. In essence they have ceased to be assets and transformed themselves into liabilities.

It seems something is seriously wrong with the way these organisations are run. They seem to be suffering from an acute management crisis which is failing to run them along business lines. Of late, nearly all the local parastatals that include Zimbabwe Broadcasting Corporation (ZBC), National Railways of Zimbabwe (NRZ), Zimbabwe Electricity Supply Authority (ZESA), Air Zimbabwe, Zimbabwe United Passenger Company (ZUPCO), Grain Marketing Board (GMB) and the Cold Storage Commission (CSC), among others, have been demanding funds from the government while they are supposed to contribute to the government fiscus out of their business ventures.

In fact they are the economic side of government. The government tried anything within its powers to keep them floating in their respective industries by reducing competition and allowing them to enjoy a monopoly. In spite of all that, they are failing to make ends meet. This reasonably dictates that they should be shut or privatized totally because certainly no private investors can partner with ailing entities if they are seriously looking for business.

This move would certainly save the government from budgetary deficits incurred through channeling funds to sustain such under-performing organisations. In view of this state of affairs, the national economic blue-print, Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim Asset), demands the application of good corporate governance to enhance its success. Zim Asset has great propensity to turn-around the economic fortunes if it is properly implemented, monitored and managed.

To boost public support and confidence, the state is under unwavering obligation to fasten its belts to uphold the fundamentals of excellent corporate governance in these ailing parastatals for them to serve a purpose.

Ideally, corporate governance is associated with a set of systems, principles and processes by which an organisation is governed. In the case of Zim Asset, there is need to provide clear-cut guidelines as to how activities will be directed or controlled in such a way that operational elements can fulfill organizational goals and objectives in a manner that adds to the value  and to illustrate how the economy will be beneficial to all citizens in the long term.

The most critical stakeholders for Zim Asset include everyone ranging from the board of directors in these quasi-government departments like parastatals, management, and shareholders,  customers, civil servants, and the generality of society. The management of the government bodies assumes the role of a trustee for the whole Zimbabwean society.

The corporate governance framework is anchored on the legal, regulatory, institutional and ethical environment of the community. This makes Zimbabwe Anti-corruption Commission (ZACC) a cardinal player to act as a watch-dog on the operations of government pillars that are implementing the processes which prop-up Zim Asset. Corruption is an impediment which disrupts the transformation of our economic terrain if it goes unchecked.

Corruption entails the abuse of public resources to enrich a few individuals who have access to such public utilities, and in most cases it gives unfair advantage to individuals, and their close mates. In view of such, ZACC's Corruption Watch should be concerned with any such abuse of power or position by anyone at any level of government.

All players should be kept under scrutiny to foster public accountability, transparency, upholding of the rule of law, and be involved in extensive consultation and participation in order to enhance universal cooperation when all issues are done in good faith.

The success of our national economic recovery is dependent on engagement of air-tight measures which protect and safeguard public funds, goods, vehicles, pension funds, medical aid funds, buildings and any other resources that belong to the government.

The precedent cases of legislators who squandered Constituency Development Funds (CDF) should not be allowed to recur as it is detrimental to the letter and spirit of development. Up to date Zimbabweans are still saddened by the loose hand of the law on such vultures which converted public funds to their selfish ends. Another instance is the case of the embattled Ex-Chief Executive Officer of PSMAS, Cuthbert Dube, and recently, the health Minister, David Parirenyatwa, who allegedly misappropriated millions of medical aid funds at the expense of the PSMAS membership, but both were never prosecuted accordingly. At the moment, public confidence in possible justice in all these cases is waning too fast among all citizens as little is being done to correct such public evils.

If this kind of irresponsibility and legal impunity is allowed to flourish, certainly we are headed for a collapse. Therefore, we have to learn our previous blunders and fortify ourselves to face all current and future challenges with vigour. Application of the law should be universal, supreme and a natural culture to boost the results of our corporate governance as we target to transform the nation through Zim Asset.

Corporate governance, as the authority structure of any government, lies at the heart of the most important issues in our society.  The corporate governance framework shapes corporate efficiency in agriculture, finance, employment stability, retirement security, and the endowments of social services. It influences social mobility, stability and fluidity. However, good political-will has direct bearing on corporate governance structures as it is fundamentally the prime result of political decisions.

The national political leadership is therefore challenged to put in place all structures which are necessary to ensure the success of Zim Asset. Therefore political interference on the contrary should be limited to enhance the rights and equitable treatment of stakeholders in the implementation of the programme. Organizations should respect the rights of shareholders and help shareholders to exercise those rights. They can help shareholders exercise their rights by openly, and effectively communicating information as well as by encouraging shareholders to participate in general meetings which are focused to satisfy the demands of Zim Asset.

Fundamentally, there is a level of confidence that is associated with a government that is known to have good corporate governance. The presences of an active group of accountable directors on the national boards contribute a great deal towards ensuring confidence in the market. Corporate governance is known to be one of the criteria that foreign institutional investors are increasingly depending on when deciding on which countries to invest in. Having a clean image on the corporate governance front also makes it easier for government to source capital at more reasonable costs to resuscitate the economy.