14 December 2012

Zimbabwe: Parastatals Turning the Corner - - Moyo

STATE Enterprises and Parastatals (SEPs) are slowly returning to profitability after decades of loss-making mainly caused by mismanagement, poor corporate governance and corruption, SEPs minister Gorden Moyo has said.

Report by Our Staff Writers

An internal report issued by Moyo last week and seen by the Zimbabwe Independent reveals that seven SEPs had implemented various strategies and policies which had improved their profitability and viability in 2011.

These are TelOne, NetOne, POSB, Zesa Holdings, Zimbabwe Power Company, Petro Trade and the National Oil Infrastructure Company of Zimbabwe.

Several other SEPs showed signs of turning around as proved by reduced levels of losses in 2011 compared to 2010.

"The SEPs which significantly reduced their losses during the period under review include Agribank, which improved from a loss of US$8,1 million in 2010 to a loss of US$286 409 in 2011, and the Grain Marketing Board (GMB), which improved from a loss of US$18,7 million in 2010 to a loss of US$6,2 million in 2011," reads the report.

Capacity utilisation in some SEPs has increased from about 30% in 2009 up to an estimated 60% due to economic improvement caused by political stability.

The Industrial Development Corporation, Agribank and Zupco realised increased working capital after they accessed lines of credit in 2011.

However, most SEPs are still beset by multi-layered problems including amplified liquidity challenges, undercapitalisation, debt overhang, recurring power outages and lack of credit lines, as well as inadequate funding for plant retooling and upgrades.

Moyo said his ministry was actively promoting good corporate governance in SEPs through monitoring compliance to relevant Acts of parliament, subsidiary legislation and the Corporate Governance Framework launched in November 2010.

Under this framework, the ministry prepares two corporate governance compliance reports up to June 30 and December 31 respectively.

Out of the 76 SEPs, only 30 submitted compliance reports for the first half of 2012, giving a 39,5% response rate for the half-year period (January 1 to June 30 2012). Last year 65,8% of SEPs complied with the bi-annual reporting framework.

Moyo reported some line ministries have appointed boards for SEPs under their portfolio, such as TelOne, National Railways of Zimbabwe and Zimbabwe Power Company.

He however lamented some SEPs including the Postal and Telecommunications Regulatory Authority of Zimbabwe, Zimpost and the Traffic Safety Council of Zimbabwe were operating without properly constituted boards.

The GMB has managed to hold its first annual general meeting in 81 years.

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