Privatisation of ailing State Owned Companies now on the Cards ...
Zimbabwe has plans to privatise and merge its ailing parastatals its Finance Minister Patrick Chinamasa said on Friday. These include state-owned telecoms, infrastructure, banking, passenger utility and manufacturing entities. Government-owned companies have performed poorly in recent years, and most of them are struggling to service their debt. They have also faced allegations of entrenched corruption and poor levels of corporate governance. Now the government is seeking to merge some of these entities or partially privatise them.
Some will be disbanded and others recapitalised, as in the case with the National Railways of Zimbabwe, which has a recapitalisation deal with South Africa’s Transnet. Chinamasa said the government expects “critical contribution from state parastatals” to help the revival of Zimbabwe’s economy. The Country hopes that a reform of state-owned enterprises will improve performance, corporate governance and service delivery.
Larger parastatals and manufacturers including vehicle assembler Willowvale Mazda Motor Industries, Chemplex Corporation and Deven Engineering are set for partial privatisation. The Civil Aviation Authority of Zimbabwe is to be “unbundled into a regulatory and airports authority” while the current recapitalisation program for the National Railways of Zimbabwe is expected to continue.
“Detailed implementation modalities of each of the Cabinet decisions will be provided in the form of a memorandum by each respective line ministry, including indications, where necessary for the engagement of technical, financial or legal advisors in order to facilitate the reform or restricting process agreed by cabinet,” said Chinamasa. Other parastatals such as Agribank and Allied Timbers have been earmarked to “seek strategic partners”. The Infrastructure Development Bank of Zimbabwe, Zimpost and the People’s Own Savings Bank will be partially privatised. State telecom companies NetOne, Telecel Zimbabwe and fixed phone operator, TelOne will also be partially privatised.
Zimbabwe is also set to merge state-owned internet service providers such as Africom, Powertel and Zarnet, while the Posts and Telecommunications Regulatory Authority of Zimbabwe will be merged together with the Broadcasting Authority of Zimbabwe.