Cabinet has approved corporate governance reforms submitted by the corporate governance unit which was working in conjunction with the Ministry of Finance and Economic Development and the State Enterprises Restructuring Agency (SERA).
This was confirmed by Vice President Constantino Chiwenga, while presenting a paper titled ‘Corporate Governance of State Enterprises and Parastatals in Zimbabwe as a National Security Issue,’ to participants of the National Defence Course number 6 of 2017 at the National Defence College today.
Retired General Chiwenga, who is also the Minister of Defence and War Veterans Affairs, said a number of reforms to improve performance in state owned enterprises and parastatals were approved by cabinet on the 10th of April this year.
“Reforms will see the merging of 14 public entities and partial privatisation of nine others, among other changes expected to enhance the performance of state enterprises,” he said.
According to Cde Chiwenga, some of the reforms include the dissolution of three boards for Zimbabwe Power Company (ZPC), Zimbabwe Electricity Distribution and Transmission Company (ZETDC) and ZESA Enterprises (ZENT) and establish one board that will take charge of the three entities.
A new one stop shop, the Zimbabwe Investment and Development Authority that will handle all investment related matters is also on the cards.
The Public Entities Corporate Governance Bill of 2017 is now awaiting the President’s signature as it has already been passed by parliament.
38 state enterprises were assessed and the results indicated that 17 of them were relying on direct and indirect funding assistance from the government through various subsidies, recapitalisation or guarantees.
Vice President Chiwenga noted that some entities were operating for long periods without full boards like in the case of Professor Francis Gudyanga who ran a one man board for the Minerals Marketing Corporation of Zimbabwe (MMCZ) and the Zimbabwe Mining Development Corporation.
He added that some board members were not appointed on merit and some sat on too many boards.
In the 1980s, the country had 20 state enterprises which contributed about 40% to the gross domestic product (GDP).
The number of state entities had increased to 107 but their contribution had fallen to 13,4% in 2014.
Vice President Chiwenga noted that the under-performance of state parastatals is due to weak corporate governance but the government is now going to strengthen supervision of state enterprises.