Friday, December 17, 2010

Speech by the Minister of State Enterprises and Parastatals Hon.G.Moyo at the Development Foundation for Zimbabwe Conference Elephant Hills Hotel, Victoria Falls, Friday 17th December 2010

Chairperson, Organisers of the workshop, Captains of the Industry, Distinguished Guests, Ladies and Gentlement.

 It is my great pleasure to be invited to this important occasion to present this crucial topic which comes at an opportune time for our economy as we are forging ahead to steer the economy towards sustainable economic growth and development. Government in its commitment to the attainment of this economic euphoria unveiled some economic policies which largely provide space for our Zimbabwean diasporas to play. Some of these economic stabiliser policies are enshrined in the Short Term Emergency Recovery Programme (STERP), STERP II and National Budget Statements.

Article III of Global Political Agreement (GPA) affirmed the need for the countries to restore economic stability and growth. In line with the founding principles of the Inclusive Government, key achievements were identified during the second Ministerial retreat for implementation of STERP under the various clusters. These clusters are the Social Cluster, Economic Cluster, Infrastructure Cluster, Security Cluster and Rights and interest Cluster. The Economic Cluster in which my Ministry falls under, is charged with the responsibility of establishing a policy framework to facilitate coordination with development partners among others.
My Ministry is continuously involved in efforts that are aimed at attracting investment in State Enterprises and Parastatals (SEPs) SEPs sector. Recently, on the 4th of December 2010 we participated in the UK investment forum and we made our presentation on investment opportunities in the SEPs sector. I am glad to inform you that they interest was overwhelming. I hope our engagement here will also produce tangible results with diasporas investing in the public enterprises.

Given the role of public enterprises in steering the turnaround of our economy emerging from economic challenges like Zimbabwe, the Government has made an unwavering commitment of promoting and implementing public enterprises reforms. The vision of Government with regards to SEPs reform through restructuring is guided by the following principles:
·     enhancing the efficiency and effectiveness of public enterprises;
·     attracting foreign direct investment;
·     mobilizing capital and expertise from the private sector;
·     accessing globally competitive technology; and
·     creating export market for newly restructured entities

In line with the Three Year Macroeconomic Policy and the Budget Framework for 2010-2012 (STERP 11) the Government unveiled restructuring policies aimed at turning around the performance of SEPs. As part of these efforts the Government, on the 18th of August 2010 adopted the priority list of the first batch of 10 SEPs to be restructured through various restructuring options on case by case basis. The entities identified in the priority list are:
1.        ZISCOSTEEL
2.        Cold Storage Company (CSCL)
3.        National Oil Company of Zimbabwe (NOCZIM)
4.        Air Zimbabwe
5.        National Railways of Zimbabwe (NRZ)
6.        Agribank
7.        Zimbabwe Electricity Supply Authority (ZESA)-(ZPC)
8.        Grain Marketing Board (GMB)
9.        NetOne
10.    TelOne.
These entities targeted for restructuring dominate the sectors they are operating in, particularly those in the power, steel production, beef processing, petroleum/ infrastructure and distribution, grain distribution, rail, air, and telecommunications. These 10 SEPs presents an opportunity for the Zimbabwe diasporas in the following areas among others:
·     Provide technical expertises as Financial or Legal advisors in some specialised transactions; and
·     Form joint ventures partnerships and buying equity in the identified SEPs.

In the energy sector there are opportunities to partner the Zimbabwe Electricity Supply Authority (ZESA) in power generation and distribution. The current generation capacity does not meet the national demand for power. There are also opportunities for independent power generation under Independent power producers (IPPs) arrangement.

There is also greater scope for investors to partner with National Railways of Zimbabwe (NRZ). In the past decade, the capacity of the railway network to provide the freight services has severely declined. Track infrastructure, signalling and telecommunication system deteriorated over the years due to lack of regular repairs and maintenance due to financial constraints of NRZ. Rehabilitation of the network and rebuilding the services offered by the rail network is therefore a major priority of the country in order to boost the industrial sector.

The fixed telecommunication provider Telone is facing challenges that hampers the rehabilitation of the infrastructure, expansion of network as well as bringing modern technologies in line with global trends.  In this regard, the fixed network company will seek strategic partners to inject the necessary capital. 

While on the other hand  NetOne needs financial and technological capacitation through strategic partnerships to be competitive in the mobile communication with its competitors in the subscriber market.

In the aviation sector the national carrier Air Zimbabwe has been battling to remain competitive owing to financial constraints that have faced the Airline over the years. The airline requires capital injection to acquire new aircrafts. The airline to raise the needed capital from internally generated resources and therefore requires a strategic partner who comes in with fresh capital injection. In the same sector the Civil Aviation Authority of Zimbabwe (CAAZ) will require substantial additional resources to provide world-class facilities and customer service centres. The work plan will involve the rehabilitation and upgrading of aviation infrastructure at the airports through private sector. 

At this point in time, I would like to emphasise that the Government of Zimbabwe does not restructure as an end in itself, but as a key tool for improving the efficient allocation of resources, for mobilising investment, and for stimulating private sector development.  This will be achieved by reducing the role of Government in economic activities thereby creating investment opportunities for the private sector participation and promoting the development of the capital market.

The recently announced indigenization laws have initially somewhat dampened investor sentiment, as they were perceived to be compelling investors to give majority equity in ventures to the indigenous people. However, after much widespread consultation, the Government has adopted a policy to review and revise the regulations through sectoral committees which will make recommendations to the Government. The sector specific recommendations take into consideration concerns from the wider spectrum of stakeholders which include business, investors and society at large. I take this opportunity to assure the safety of new investments will be guaranteed through Bilateral Investment Promotion and Protection Agreements (BIPPAs) signed with a number of countries.

The Government has noted the need to improve the legal, institutional and regulatory arrangements and has therefore started the review of the legal and institutional framework for State Enterprises and Parastatals aimed at improving the effectiveness, autonomy and accountability of these SEPs. In this regard, the Government recently launched a Corporate Governance Framework for State Enterprises and Parastatals which gives the guidelines that spells out how SEPs are directed and controlled by emphasising the need for Boards to adhere to principles of Good Corporate Governance which include the following among others; accountability, transparency, openness, responsibility and fairness. Further, the recently launched One Stop Investment centre also provides the platform for Diasporas to benefit from the process of starting a business in Zimbabwe.

In conclusion, I reiterate that the Government has once again rekindled its desire to restructure SEPs in order to stimulate economic growth. As the country adopt the principles of a democratic developmental state, Government promulgated various macroeconomic policies which afford investors, both local and foreign, vast opportunities for investment ready for take-up.   I call upon diasporians to express interests to the various arms of Government on specific sectors for consideration by the authorities.  Let us all unite to revive our SEPs for the restoration of our economic glory and assume our rightful position among progressive nations.

I Thank You



Tuesday, December 7, 2010

Restructuring of state enterprises in Zimbabwe: Opportunities for international investors Zimbabwe Rising Conference 3–4 December 2010 United Kingdom Speech by Hon. G. Moyo and read on his behalf by Mr. Edgar Nyoni Executive Director of SERA

Chairperson, Organisers of the workshop, Caiptains of the Business Sector, Ambassador of Zimbabwe in the United Kingdom, Collegues from Zimbabwe, Distinguished Guests, Ladies and Gentlement.

It is a great pleasure to be invited to this important occasion to present this crucial topic which comes at an opportune time for our country as we are forging ahead with the aims of improving the performance of SEPs as part of our efforts to turn around the economy.

The Global Political Agreement (GPA) which saw the formation of a Government of National Unity (GNU) ushered a new era characterised by renewed appetite to revive the economy through the need to attract investment. This turn of events has been further cemented when the Government adopted more realistic and prudent policies which have seen the country record GDP growth for the first time in a decade, although coming from a very low base. Official GDP growth of more than budget statement of 8 percent is forecast for the year 2011 which strengthen the needs of foreign investment.

This landmark political situation has seen Zimbabwe emerging from a decade of economic challenges which were characterised by high unemployment, negative Gross Domestic Product (GDP) rates, low capacity utilization, low savings and investment levels among other challenges. This economic situation did not spare the operations and viability of the public enterprises in the country.

Given the role of public enterprises in steering the turnaround of economies emerging from economic challenges like Zimbabwe, the Government has made an unwavering commitment of promoting and implementing public enterprises reforms. The adoption of restructuring strategies of public enterprises as one of the key economic reforms will strengthen the role played by the public enterprises sector in economic growth and development. The vision of Government with regards to restructuring is guided by the following principles:

• enhancing the efficiency and effectiveness of public enterprises;

• attracting foreign direct investment;

• mobilizing capital and expertise from the private sector;

• ensuring wider indigenous participation in the economy;

• reducing the public sector borrowing requirements;

• accessing globally competitive technology; and

• creating export market for newly restructured entities


Distinguished Guests, ladies and Gentlemen, the under performance of our public enterprises over the past years can not be rectified without religious adherence to international best practices in restructuring of state owned enterprises tailored to the environment prevailing in the country. The current thrust world over has shifted from whole sale privatization to a more conservative government shareholding dilution through strategic partners, engagement of joint venture partners, listing on capital markets and Public Private Partnerships (PPPs).

The initial phases of the privatisation in Zimbabwe were fairly successful as evidenced by the restructuring success stories that saw successful completion of privatisation of Commercial Bank of Zimbabwe (CBZ), Dairiboard Zimbabwe Limited, AICO (formerly Cotton Company of Zimbabwe), Caps (Pvt) Ltd and recently Ziscosteel.

It should however be noted that when the relative stability in the economy was achieved in 2009, the Government renewed its commitment to the implementation restructuring inline with its policy on public enterprise reform. In line with the Three Year Macroeconomic Policy and the Budget Framework for 2010-2012 (STERP 11) the Government unveiled restructuring policies crafted to turnaround the performance of State Enterprises and Parastatals (SEPs). As part of these efforts the Government approved procedures for the SEPs reform process which subsequently led to the identification of ten (10) major public enterprises that have been prioritized as first candidates of focus for restructuring on a case by case basis after Cabinet approval. The entities included in the priority list are;

1. ZISCOSTEEL

2. Cold Storage Company (CSCL)

3. National Oil Company of Zimbabwe (NOCZIM)

4. Air Zimbabwe

5. National Railways of Zimbabwe (NRZ)

6. Agribank

7. Zimbabwe Electricity Supply Authority (ZESA)-(ZPC)

8. Grain Marketing Board (GMB)

9. NetOne

10. TelOne.

These entities targeted for restructuring dominate the sectors they are operating in particular: power, steel production, beef processing, banking petroleum/ infrastructure and distribution, grain distribution, rail, air, and telecommunications.

In the energy sector there are opportunities to partner the Zimbabwe Electricity Supply Authority (ZESA) in power generation and distribution. The current generation capacity does not meet the national demand for power but Zimbabwe is endowed with a wide variety of conventional energy sources for electricity generation, of which the main ones are coal, hydro and coal-bed methane. There are also opportunities for Independent Power Generation for rehabilitation of existing infrastructure and new projects altogether.

There is even greater scope for serious investors that can partner National Railways of Zimbabwe (NRZ). In the past decade, the capacity of the railway network to provide the services has been severely eroded. Track infrastructure, signalling and telecommunication system deteriorated over the years due to lack of regular repairs and maintenance because of financial constraints of NRZ. Rehabilitation of the network and rebuilding the services offered by the rail network is therefore a major priority of the country with a strategy of allowing private players.

The fixed telecommunication provider Telone is facing an uphill task of rehabilitating the telecommunication infrastructure and to expand the network as well as bringing modern technologies in the sector in line with global trends. In this regard, the fixed network company will be looking for strategic partners.

While NetOne the mobile company needs financial and technological capacitation throug strategic partnerships to catch up with its competetiors in the subscriber base and technology.

In the aviation sector the national carrier Air Zimbabwe has been battling to remain competitive owing to financial constraints that have faced the Airline over the years. The airline requires financial injection to acquire new aircrafts and other operational expenditures, for the airline to raise the needed capital from internally generated resources it has proved to be difficult and therefore the airline requires a strategic partner who comes in with fresh capital injection. In the same sector the Civil Aviation Authority of Zimbabwe (CAAZ) will require substantial additional resources to build a sustainable competitive advantage through provision of world-class facilities and customer service. The work plan will involve the rehabilitation and upgrading of aviation infrastructure at the airports and the restructuring programme to attract much needed private sector funding for rehabilitation and upgrading of airport facilities to accommodate the projected growth in passenger and freight movements.

Given the attractiveness of some of these assets, the Government has considered disposing some of these assets to strategic investors who will assist in strengthening the technological base, access to foreign markets and a stable financial base. With new investment in many of the privatised enterprises, it is expected that entities will improve their performance, realise their expansion drive and create new jobs.

At this point in time, I would like to emphasise that the Government of Zimbabwe does not restructure, in particular privatise as an end in itself, but as a key tool for improving the efficient allocation of resources, for mobilising investment, and for stimulating private sector development. This will be achieved by reducing the role of Government in economic activities thereby creating investment opportunities for the private sector participation and promoting the development of the capital market.

The Government is fully aware of the vast investment opportunities in the public enterprises and hence it has committed itself to unlocking value in these enterprises. The unveiling of new investment opportunities in infrastructure expansion and rehabilitation is one of the key areas where foreign investors are being called to explore through strategic partnerships and Public Private Partnerships (PPPs). The Government is currently crafting Public Private Sector Partnerships Regulatory and Legal Framework that will see the creation of the PPP Unit as a central unit responsible for coordinating, implementation and monitoring of Public Private Partnerships (PPPs) projects in Zimbabwe.

Years of economic decline as I have earlier alluded to, have resulted in a lot of the country’s infrastructure being in need of refurbishment or development/expansion. Inadequate power, telecommunications networks, water supply, rail network, and lack of dual roads are constraining business operations. I therefore call upon interested investors to urgently express their interests in these sectors which together form the economic backbone of our country.

The recently announced indigenization laws have initially somewhat dampened investor sentiment, as they were perceived to be compelling investors to give majority equity in ventures to the indigenous people. However, after much widespread consultation, the Government has adopted a policy to review and revise the regulations through sectoral committees which will make recommendations to the Government. The sector specific recommendations take into consideration concerns from the wider spectrum of stakeholders which include business, investors and society at large. I take this opportunity to assure the safety of new investments will be guaranteed through Bilateral Investment Promotion and Protection Agreements (BIPPAs) signed with a number of countries.

The Government has noted the need to improve the legal, institutional and regulatory arrangements and has therefore started the review of the legal and institutional framework for State Enterprises and Parastatals aimed at improving the effectiveness, autonomy and accountability of these SEPs. In this regard, the Government recently launched a Corporate Governance Framework for State Enterprises and Parastatals which gives the guidelines that spells out how SEPs are directed and controlled by emphasising the need for Boards to adhere to principles of Good Corporate Governance which include the following among others; accountability, transparency, openness, responsibility and fairness.

In conclusion, I reiterate that the Government has once again rekindled its desire to restructure SEPs in order to stimulate economic growth. As the country follows the principles of a democratic developmental state, government promulgated various macroeconomic policies which afford investors, both local and foreign, vast opportunities for investment ready for take-up. I call upon you investors sitted here today to express your interests to the various arms of Government on specific sectors for consideration by the authorities. Let us all unite to revive our SEPs for the restoration of our economic glory and assume our rightful position among progressive nations.

Philippians 4v8 “ Finally, brethren, whatsoever things are true, whatsoever things are honest, whatsoever things are just, whatsoever things are pure, whatsoever things are lovely, whatsoever things are of good report; if there be any virtue, and if there be any praise, think on these things.”

I Thank You

Tuesday, October 19, 2010

PRESS STATEMENT BY THE HONOURABLE GORDEN MOYO, MINISTER OF STATE ENTEPRISES AND PARASTATALS ON THE ADOPTION OF A CORPORATE GOVERNANCE FRAMEWORK FOR STATE ENTERPRISES AND PARASTATALS

Good afternoon Ladies and Gentlemen

I am glad to announce this afternoon, that the Government of Zimbabwe (GoZ) as of yesterday, Wednesday the 13th October 2010, approved a Corporate Governance Framework for State Enterprises and Parastatals.

The Corporate Governance Framework will guide and inform State Enterprises and Parastatals stakeholders. The adoption of the Corporate Governance Framework (CGF) is a significant milestone, in our quest to transform state owned enterprises into viable and well run institutions. The Corporate Governance Framework will be implemented in tandem with the Companies Act, the Public Finance Management Act and enabling Acts of Parliament governing State Enterprises and Parastatals.

State Enterprises and Parastatals are varied in nature and there is “no one size” fits all corporate governance solution. However there are basic universal governance principles and values, which every SEPs needs to fulfill in order to achieve set objectives and increase shareholder value. These principles are include but are not limited to the following: accountability, responsibility, transparency, fairness and ubuntu.

In summary, the overall objective of the Corporate Governance Framework is to achieve better company performance, higher profitability and efficiency levels, and increased investor confidence in SEPs which will eventually lead to improved shareholder value and improved services for the people of Zimbabwe.







Specifically, the objectives of the Corporate Governance Framework, among others, are:

• To improve efficiency and effectiveness in State Enterprises and Parastatals

• To clarify relationships and reporting structures between Responsible Ministries, Boards and Management;

• To provide for transparency, role clarity in terms of responsibilities; and accountabilities;

• To provide for performance agreements, monitoring and evaluation of performance;

• To minimise conflict of interest; and

• To provide for clear reporting and communication requirements.

Practising Good corporate governance comes with it a lot of benefits some of which are:

• Provision of increased transparency in corporate structures in operations of organisations

• Reduction of external interference and conflict of interest.

• Role clarity, accountabilities and responsibilities for stakeholders.

• Enhancement of operational efficiency

• Enhancement of investment potential through increased investor confidence.

As has been seen the world over, SEPs are critically important in the development of economies. In Zimbabwe, as has been said before, SEPs have the potential to contribute about 40% of GDP and to spearhead economic growth through the provision of such utilities as energy and water.

Our SEPs are in the forefront of infrastructure development in the energy, water, transport and telecommunications sectors. These are the critical enablers that drive the productive sectors of the economy. In a developmental state, SEPs, also provide the necessary leverage for Government interventions to spearhead development.



The Corporate Governance Framework for State Enterprises and Parastatals will be launched later this year, at an event to be attended by senior government officials, heads of SEPs and other stakeholders. Induction Training for SEPs board members and management will then be rolled out.

It is the conviction of the government, that the CGF will create a new management culture and paradigm for our SEPs and improve the development of the economy as a whole. It is a welcome idea for our SEPs to set benchmarks that will be used by other similar organizations in the region.

May I conclude by saying, that the mere putting in place of a framework is not the end of the road nor does it necessarily follow that compliance will be automatic. A lot more work has to be done and that journey will require the cooperation of all stakeholders in building a culture of good and responsible citizenship.

Finally I would like to quote my favourite verse;

“Finally brethren, whatsoever things are true. Whatsoever things are honest, whatsoever things are just, whatsoever things are pure, whatsoever things are lovely, whatsoever things are of good report, If there be any virtue; and if there be any praise, think of such things and work for such things”. I will add believe in such things and work to achieve them(Philippians 4 vs 8)

I thank you



Honourable Gorden Moyo

Minister of State Enterprises and Parastatals

14 October 2010

Speech by the Minister of State Enterprises and Parastatals, Hon. G. Moyo at the ZNCC Business networking meeting on the 8th of October 2010. Venue: ZNCC Boardroom Bulawayo.

ZNCC Regional President

ZNCC Regional Committee Members

Distinguished Guests

Ladies and Gentlemen



It is my pleasure to welcome you all to this important workshop. This workshop comes at a critical time in the economic turnaround of our economy. I am not here to answer all the questions about the pricing structure in Parastatals but to discuss, share ideas and learn together as we go.



By their existence, State Enterprises and Parastatals represent veritable avenues for government expenditure on the citizenry in diverse ways. Through State Enterprises and Parastatals, the government provides the following to its citizens:

Infrastructure, Water, Electricity, Roads, Transport, Basic education, Primary health, Scientific research and Market regulation to ensure a level playing field.

The above public goods provide the preconditions for competitiveness and economic development. The social returns of producing these public goods and services exceed the private returns hence the public enterprises have to provide them or else the private sector stays away.



As the Minister of State Enterprises and Parastatals, my Ministry deals with cross cutting issues in State Enterprises and Parastatals which include issues of corporate governance, legislative review and other policy issues. In terms of the day to day operations these entities report to their Line Ministries.



Ladies and gentlemen, let me quickly point out that State Enterprises and Parastatals (SEPs) are the engine that drives national economic growth, and have an important role in macroeconomic stabilization. Some of these SEPs are economic enablers in that they provide utilities such as electricity, water, communication and transport. Efficient and reliable supply as well as affordability of these will ensure an increase in capacity utilisation across all sectors of the economy.



Efficiency in delivery can only be aided by a well defined tariff structure that will enable SEPs to recover the costs incurred in production and at the same time coming up with a viable price to be charged for these goods and services. Utilities such as electricity, water, communication and transport constitute a significant proportion of the production costs for the productive sectors. Thus a well defined tariff structure is called for and this should be one that bears end-to-end cost of providing that good/ service plus an element of profit.



To this effect Government through my Ministry in collaboration with SEPs and Line Ministries is reviewing the tariff structure regimes in respect of goods and services provided by public entities. At some point in time the general framework will require contributions from stakeholders like yourselves.



The need for a Tariff Structure is crucial as it complements the government’s effort in the restructuring of SEPs for economic revival. The establishment of a realistic tariff will go a long way in enabling SEPs to realize gains in their operations and attract investors into the market and the SEPs themselves. A competitive tariff will create a conducive environment for investment and for the achievement of the profit objectives for firms.



In the business environment they operate, SEPs incur a lot of costs including input costs. Many SEPs are unable to recover their costs of production due to tariffs that are not reflective of the costs incurred in providing a service o a public good. This defeats the break even (plus surplus) objective of the commercially oriented SEPs, depletes the shareholder value and also deters the entrance of potential investors.



The Government of Zimbabwe is very concerned with the pricing structures and is aware that more needs to be done at Parastatals like Air Zimbabwe, Tel-One, ZINWA and Zimbabwe Electricity Supply Authority (ZESA) in terms of service delivery, skills retention and cost rationalisation with reference to regional average tariffs.



In Zimbabwe the tariff structure has been said to be higher in most instances compared to the global trends, but if we take the electricity sector we find that the regional tariff in electricity has been pegged at 12.6 cents/ unit and our ZESA is charging 7.5 cents/ unit which is even lower than the regional tariff. With this we cannot possibly say that ZESA is charging exorbitant prices, maybe the problem is that people have low disposable incomes.



Ladies and gentlemen, it is a well known fact that the last ten years or so have been the most difficult for all sectors of the economy and public entities were not spared, if anything, they were the most affected. The challenges were related to:

• Hyperinflation

• Deteriorating infrastructure due to lack of resources for maintenance and acquisition of new equipment and technologies.

• Huge debt overhang,

• Low capacity utilisation, among others



According to studies carried out by the Breton Woods Institution-World Bank, the adoption of the multicurrency regime by the Government of Zimbabwe (GoZ) created problems for Parastatals even though it stopped hyperinflation. The Parastatals’ working capital became scarce since they did not have foreign savings of their own and they needed to adapt their billing systems to the new currency. For entities like ZESA, ZINWA, Telone, NRZ, etc the billing systems for various reasons, became obsolete leading to the institutions resorting to estimates. They only had low revenue collections that were used to pay for payrolls and part of operational costs the remainder being used for maintenance and purchase of new equipment.



Let me assure you that the Government is working closely with Line Ministries and the utilities to come up with more reliable billing systems if not the state of the art billing systems.



Whether a price is exorbitant or not depends on several factors including resource availability. For example ZESA has a nominal capacity of producing 1 960 MW against a nominal demand of 1 500MW, but only 1 100 MW are being produced at the moment and the peak demand can go up to 2 200 MW. This means that ZESA cannot meet its national demand due to low capacity utilisation and the limit of the import capacity from the region.



The other problem can be that of the recurring debt since the adoption of the multicurrency regime. The Parastatals had a problem of converting outstanding arrears to the multi-currency system. It would be a good thing for business to verify their bills against arrear components and seek audience with say, ZESA authorities as the situation may be different from organization to organization.



In the economic environment we find that SEPs have competitors especially in the telecommunications industry where for example Telone and Netone have to compete with private providers Telecel and Econet. This means that they are price takers and have to charge prices that are prevailing in the industry if they are to survive such that the issue of high pricing is ruled out. The existence of competition in these entities rules out high prices.



We all have to agree that input costs are the major variable in determining the price of a good or service. Efforts should be directed towards lowering these costs without compromising the quality of the ultimate outputs.



In conclusion I would like to say, Government, through State Enterprises and Parastatals joint projects, should intervene, removing constraints to growth that would allow the economy to evolve and the necessary structural changes to take effect. The Government is indeed very much aware that more work needs to be done to ensure progress in our endeavours to revamp the economy. I firmly believe that we have the capacity to achieve more effective reforms in the economy and refocus Zimbabwe towards sustainable growth.



As I always like to like to quote my favourite verse;

“Finally brethren, whatsoever things are true. Whatsoever things are honest, whatsoever things are just, whatsoever things are pure, whatsoever things are lovely, whatsoever things are of good report, if there by any virtue; and if there be any praise, think on such things and work for such things”.

……(Philippians chapter 4 vs 8)



On that note, it is my pleasure to declare this important and timely meeting duly opened and I wish you all very fruitful deliberations.



Thank you.

Tuesday, September 7, 2010

Closing Remarks given by Hon G. MoyoMinister of State Enterprises and Parastatals at the Public–Private Partnership Workshop, HICC, 06 Sept 2010

Hon. Minister of Economic Development and Investment Promotion.Hon Tapiwa Mashakada
Programmes Director, Prof. Paul Mavima
Sponsors of the Conference : The Development Bank of Southern Africa and the Infratructure Development Bank of Zimbabwe
Ladies and Gentleman

I am honoured to have been invited to give the closing remarks at this workshop. I am reliably informed that your workshop has considered and adopted the PPP’s Draft Legislative Review, the Policy Document and the Institutional Framework and Guidelines for Public Private Partnerships. These documents will now go through the processes of government for adoption and implementation by the Government of Zimbabwe.


You have therefore laid the foundations for an important policy of government by your attendance and participation at this workshop. In my thinking this is how Government should work that is there should be sufficient stakeholder consultation followed by a predictable policy adherence and implementation.

The Government of Zimbabwe faces huge challenges as it implements its economic restructuring programmes, particularly in the current global economic downturn. Critical to the economic recovery programme is the provision and expansion of basic services and the development of sustainable infrastructure. New infrastructure needs to be provided and existing infrastructure upgraded or rehabilitated, to deliver public services more effectively and extend access to services to a greater number of the population than currently have access to these services.


The Government of Zimbabwe has acknowledged that it presently does not have the financial resources to expedite its economic turnaround. In order to deliver such critical capital investments whilst maintaining sound fiscal policies, the Government has now sought alternate means of financing such investments including the use of PPPs. Internationally, including in particular, the UK, Europe, Australia and South Africa, PPPs are being used effectively as a means of providing national assets such as roads and railways, and social assets such as schools and hospitals.

PPPs will form therefore play an integral component of Government’s overall strategy for the provision of public services infrastructure across all appropriate sectors. As experience elsewhere has shown, PPPs can offer value for money benefits and also reduce budgetary pressure whilst improving service delivery. These advantages mean that PPPs, whilst not being the answer to all Government’s project delivery needs, should be investigated in the first instance when suitable projects are being evaluated.

The policy on PPPs complements the direct role of Government of anchoring economic growth and development through the provision of enabling infrastructure as this requires a partnership approach under which Government and private entrepreneurs work more effectively together towards enhancing the delivery of public service.

In light of the fundamental changes that have taken place in Zimbabwe from 2004 to date, it was felt that there was a need for the 2004 PPP Policy document to be reviewed and revised.The new PPP policy document must offer assurance to potential private investors, current service providers, empowerment groups, labour and other interested groups that the Government is committed to a transparent and predictable PPP policy process.

The Ministry of State Enterprises and Parastatals is currently driving the process of restructuring, commercialization and privatization of state enterprises and parastatals. Ten public entities have already been identified for restructuring this side of Christmas and these are the Cold Storage Company, Ziscosteel, NOCZIM, Air Zimbabwe, Agribank, NRZ, ZESA, GMB, NetOne and TelOne. Seven out of the ten companies listed are infrastructure related companies and we would like to invite potential investors to consult with line Ministries responsible for these entities.

As a Ministry we have committed ourselves in ensuring that State enterprises and Parastatals should match if not exceed the private sector when it comes to corporate governance standards so that they have the capacity to engage in successful PPPs.

The introduction of transparent guidelines and regulations, coupled with appropriate regulatory safeguards, will guarantee security and a competitive environment for private investment in PPP programmes.

The Government cannot do this by itself, we need to work with you, offshore and at home.

We all need to work together cooperatively.

We all have to take responsibility

We owe it to each other and,

We owe it to our children

In conclusion may I quote from the book of Philippians 4 Vs 8 ‘Finally, Brethren, whatever is true, whatever is right, whatever is noble, whatever is pure, whatever is lovely, whatever is admirable, if anything is praiseworthy and excellent, think about such things’.

I thank you.

Monday, August 30, 2010

Speech delivered by the Minister of State Enterprises and Parastatals, Honourable Gorden Moyo, MP at the National Code on Good Governance Familiarization and Induction workshop, Pandhari Lodge, Harare

Salutations


Chairman of the Board of the National Code on Corporate Governance, Mr. Canaan Dube

Chairman of the Steering Committee of the National Code on Corporate Governance, Mr. Tinashe Rwodzi

Chairpersons of the various thematic committees

Workshop participants

Observers

Members of the media

Ladies and gentlemen



It gives me great pleasure to be with you this morning as you familiarize yourselves with the code drafting project for the National Code on Corporate Governance, albeit several months into the project.

No one needs to be reminded that Zimbabwe is a country that is blessed with God given natural resources including minerals, tourist attractions and human capital. It follows that we should be enjoying benefits of these endowments.

For a number of reasons Zimbabwe is not performing to expectations.

The background of rapid de-formalisation, hyper inflation and isolation resulted in a shift in the way we do business in Zimbabwe

The most prominent and worrying of outcomes are the moral decadence and bankruptcy and the associated plethora of unethical behavior that we have witnessed in both formal and informal sectors of our economy.

Most businesses, state enterprises and NGOs degenerated resulting in eventual collapse with devastating economic and social costs consequently.

I am reliably informed that it was against this background that the concept of crafting a National Code of Corporate Governance was developed. The intention is to ensure that the country’s businesses, be they in the private, public or NGO sector have efficient management systems, efficient control structures and strike a balance between economic and social goals with a greater corporate conscience and accountability.

The overall aim of the project is to ensure that not only are resources utilized efficiently, but that boards act in the interests and expectations of their company and shareholders whilst at the same time reducing the risk of financial crises. There is a need to ensure that there is accountability of a board and key overseeing management for the stewardship of resources. Therefore, there is no doubt that in any organization, private or public, good corporate governance is ultimately about effective leadership.

Corporate governance in any enterprise is primarily a function of three things, namely;
• Direction and leadership
• Risk management and control
• Accountability and reporting ie the provision of a true, fair and accurate account of the stewardship of the enterprise in a transparent manner to those with a legitimate interest.

We are all aware that practicing good corporate governance will restore investors’ confidence and this will enable us as a country to attract investment, gain access to external financing and grow sustainable institutions which our country so desperately needs.

One of the essential features of sustainable institutions with sustainable performance is their integration of economic, social and environmental performance.

Zimbabwe thus joins a growing list of countries with their own codes of corporate governance including South Africa, Malawi, Kenya, India and China among many others.

My Ministry is finalizing a framework for good corporate governance for all State Enterprises and Parastatals as part of measures to enhance their performance and viability. Our efforts and the work of the National Code Drafting project are in no way contradictory, rather they are complementary and this shows the importance that the Government of Zimbabwe is attaching to issues of good corporate governance.

Government’s determination to revive our economy has seen us take a decision to restructure parastatals which has been preceded by classifying parastatals into three groups which determine whether they will be commercialized, restructured or privatized. This will pave the way for Government to retain its role of providing policy framework.

Ladies and gentlemen, this concern provokes the perennial debate on whether the government can run a business enterprise successfully? More often it has been claimed that governments are generally interested in control at the expense of efficiency.

My humble submission to this debate is that it is not necessarily government ownership that hampers the efficiency and effectiveness of state-owned enterprises. In stead it is ineffective government control that hampers the efficiency and competitiveness of public enterprises.

By this, let me not be misconstrued for calling of micromanaging and meddling in the running and management of parastatals. Far from it,I am merely drawing your attention to the changed matrix and paradigm shift in how our Government is approaching matters.

It is now performance that underpins Government’s interest in what is going on in public enterprises. Inevitably, the success of state enterprises depends on striking the appropriate balance between control and accountability on the one hand, and, performance and entrepreneurship on the other. This, in our view, is ultimately the objective of good governance.

Your efforts are therefore very timely considering Government’s thrust on indigenization. Indigenization, appropriately implemented, should breed success not spell the doom of yet another enterprise …I am interested in what the Thematic Committee on Culture, Values, Ethics and Development will discover about us, and what promotes and hinders our quest to perform in this area.

It is therefore pleasing to note that the people of Zimbabwe as represented by the august membership in this room, not only share the same sentiments as their Government, but have taken their own initiative to champion this worthy cause.

You will agree with me Ladies and Gentlemen that Government has a critical role to play in establishing the economic and political fundamentals that underpin economic growth and in facilitating the practice of good governance, not only for public enterprises but for private business as well.

Let me reiterate the commitment of Government to continue in creating and ensuring a stable environment conducive for business.

I am optimistic that this seminar will inform, integrate and strengthen members in their endeavour to develop the National Code on Corporate Governance.

With these few words I officially declare this workshop open. I thank you. Siyabonga. Tinotenda. Taboka.

Wednesday, August 25, 2010

Government adopts a List of State Enterprises and Parastatals for Restructuring in 2010

I am pleased to announce this morning, that Government has adopted a priority list of ten parastatals that will undergo restructuring before the end of this year. Government’s decision to produce and adopt a priority list underlines the open, orderly, planned, phased and transparent approach to restructuring, commercialization and privatization.

The restructuring process will be carried out on a case by case basis for each of the listed entities. This reform process is in resonance with Government’s medium to long term economic rehabilitation programme.

The 10 entities included in the priority list are the Cold Storage Company, Ziscosteel, NOCZIM, Air Zimbabwe, Agribank, NRZ, ZESA, GMB, NetOne and TelOne.Line Ministries working together with the State Enterprises Restructuring Agency (SERA) will now be expected to produce business and restructuring plans for consideration by Government.

Let no one remain speculating on the Government’s basis of this prioritization. Understanding and appreciating the rationale by both the public and the parastatals themselves is crucial if our strategies to reinvigorate these State Enterprises are to succeed.

Government took into account the strategic nature of each state enterprise and its potential to attract investors. Fundamentally, it is those enterprises whose successful revitalization could catalyze the recovery of others directly or indirectly and consequently stimulate economic growth.

However some enterprises have been included on the priority list because they are already restructuring and therefore such progress need support.

Since Government recognizes that the State Enterprises and Parastatals (SEPs) are critical catalysts and enablers for the recovery of all key sectors of our economy, due attention and diligence has been invested in this restructuring process.

This realization has provided an impetus for the Government to unveil interlinked restructuring policies, crafted and promulgated in an effort to improve the efficiency and effectiveness of SEPs so as to steer the economy towards sustainable growth and an effective development path.

It should be observed as well that this restructuring is being done on the background of the need by Government to address “funding trap challenges,” fiscal drain, inefficiencies and corporate governance challenges.

On the same note, it should be realized that “Funding traps” which have manifested themselves through the failure by the public utilities to meet their financial obligations are characterized by amongst others:

• Inappropriate operating and financial structures;

• Undercapitalization;

• Serious deterioration of infrastructure due to limited resources for both maintenance and new investments

• A huge debt overhang in a liquidity crunch environment;

• Lack of Credit lines.

These challenges have for some time now constricted SEPs from sustaining their operational requirements and recapitalization needs thereby undermining their capacities for service delivery to the public.

By this initiative, Government has undoubtedly demonstrated its commitment to creating an enabling business environment and leading by example in enhancing a culture of corporate governance.

Notwithstanding the many hurdles to be faced at implementation, the reforms would eventually go a long way in improving the SEPs balance sheets and ensuring their financial independence, so that in the near future they can approach capital markets for their projects and contribute accordingly to the economy and national development. Indeed public enterprises have essentially a social responsibility role, in as much as they should strive for healthy financial performance.

Let us all embrace heartily these reforms and be determined to achieve progress for the good of our country. The time is now and the irreversible process has begun.

Tuesday, August 24, 2010

KEYNOTE ADDRESS BY HON. G. MOYO AT THE “THE BEST PRACTICES IN LEADING AND MANAGING EXCEPTIONAL STATE OWNED ENTERPRISES AND PARASTATALS AND GOVERNMENT AGENCIES BOARDS, AFRICA 2010 PROGRAMME”, 19-20 AUGUST 2010, HILTON HOTEL, SANDTON, JOHANNESBURG, SOUTH AFRICA.

Honourable Ministers from the host country the Republic of South Africa and those from the region and beyond
Senior Government Officials here present
Board Chairpersons, Chief Executive Officers, and Senior Management of State Owned Enterprises and Parastatals here present
Invited Guests
Ladies and Gentlemen


1. I am very delighted to have been invited, not only to be part of this special occasion but also to be given an opportunity to address this workshop. This workshop comes at a time when debate on corporate governance issues has gained worldwide prominence. The subject has also received wide publicity due to the negative, if not disastrous, impact it has had on multinational corporations across the world as well as national economies.

2. Distinguished Guests, Ladies and Gentlemen, let me begin by pointing out that State Owned Enterprises/Parastatals (SOEs) in developing economies are the engine that drives national economic growth, and have an important role in macroeconomic development and stabilization. It is important to note that most of the major SOEs are economic enablers for the growth of other sectors in that they provide utilities such as electricity, water, communication and transport networks. Efficient and reliable supply of the public utilities naturally should ensure an increase in capacity utilization across all sectors of the economy, most importantly the private sector.

3. Governments in the region therefore are firmly convinced that it is critically important that the full potential of SOEs be realized in order to spur economic growth and development. In Zimbabwe, SOEs should normally contribute up to 40% of the GDP. Also of note is that in its economic recovery programme the Inclusive Government has rightfully identified and entrusted SOEs to spearhead recovery, especially in ensuring food security, infrastructure rehabilitation and improved social services delivery. These are the top most priorities of Zimbabwe’s Inclusive Government not of course excluding political stabilization and democratization.

4. Ladies and Gentlemen, while it is common knowledge that the last decade registered a significant decline in the operations of SOEs, I shall pay particular focus to Zimbabwe whose situation was very unfortunate and quite challenging. The combined effect of political and economic challenges had a severe impact on almost all SOEs in the last decade and the consequences could yet be far more devastating for the country in future unless appropriate measures are put now. The challenges faced by SOEs were characterized by some of the following:


• huge debt overhang;

• serious deterioration of infrastructure due to limited maintenance;

• lack of new investments;

• shortages of working capital which have constrained the procurement of essential spares;

• limited access to external lines of credit; and

• human capital flight.



Equally significant to note is that civil strife in Zimbabwe has had a serious negative impact on the economy.



5. Given this state of affairs and bearing the developmental role to be spearheaded by SOEs, the Government of Zimbabwe has enunciated a policy of restructuring, commercialization and privatization of SOEs on a case by case basis. Skeptics in our midst, and they are many and in this case with justifiable concerns, would claim that this is not new. Such policy pronouncements have been made before and nothing happened. As Government we are very much aware of and appreciative of such concerns. Even before the Zimbabwe crisis, there was criticism that:

“The framework for public enterprise restructuring in Zimbabwe is a minefield, characterized by a multiplicity of pieces of legislation, institutions, and at times contradictory policies, and even policy reversals’



6. The current Inclusive Government of Zimbabwe has unanimously agreed on a paradigm shift and I can emphatically state that my ministry as responsible for this important mission will ensure the end of ad hoc approaches to policies resulting in contradictions and counter production. The process of harmonizing the process has admittedly been slow but is coming on very well so far. Our kingpin in turning around the fortunes of SOEs is adopting the Global Best Practices, especially Corporate Governance.



7. The Corporate Governance Framework we are working on should factor and ensure the following:

a. More disclosure by SEPs

b. Clarify objectives and secure an explicit mandate

c. Management Autonomy in operational decision making

d. Running State-Owned Enterprises Purely on a Commercial Basis

e. Performance Management

f. Restructuring through social dialogue

g. Staff Motivation



8. To achieve these ideals Ladies and Gentlemen we need not re-invent the wheel, we are drawing lessons from experiences in the region, and throughout Africa particularly lessons from other emerging economies. I strongly believe that lessons from Middle, Eastern Europe, the Far East, Brazil and other South American countries, are useful in developing strategies for successful governance of SOEs in general. Lessons and experiences on restructuring programmes with special reference to privatisation of SOEs are particularly useful to us Zimbabwe and I believe to us all here.



9. Ladies and Gentlemen, Principal Stakeholders in the exercise of good Corporate Governance include Governments, Boards of Directors, Chief Executive Officers of companies and SOEs, other stakeholders, Senior Management and Auditors. Other stakeholders with a part to play include suppliers, employees, creditors, customers and communities at large whose actions or inactions have an impact on the seven pillars of good corporate governance which are:



• fairness,

• responsibility,

• accountability,

• transparency,

• discipline,

• independence; and

• social responsibility.



It is only when an organization observes these principles that it can be said to be practicing good corporate governance, therefore it remains the onus of Boards of Directors to ensure proper governance in the organizations they lead.



10. It is therefore important to understand and appreciate the role that each stakeholder plays in the governance of SOEs and Government Agencies. Boards of Directors, as custodians of Corporate Governance are entrusted with ensuring the adherence to good business ethics in their respective organizations. Boards of State Enterprises and Parastatals should therefore have the necessary authority, competencies and objectivity to carry out their function of strategic guidance and monitoring Performance of senior management and the organization as a whole. Members of Boards are expected to act with integrity and should be held accountable for their actions.



11. Zimbabwe is, as I have already noted, at an advanced stage of developing a Corporate Governance Framework for State Enterprises and Parastatals not only to provide guidelines on best practices, but also to provide a revised Institutional Framework that addresses issues of reporting lines, responsibilities and relationships among key stakeholders in the management and administration of State Enterprises and Parastatals. There is no more room for indecision and policy vacillations on our part and therefore SOEs managers have no excuse either. The inclusive Government of Republic of Zimbabwe therefore stands to benefit immensely from the outcomes of workshops like this one.

In conclusion, it is my sincere hope that as we deliberate on matters of governance of SOEs, we will not only come up with strategies for successful management of these entities, but also be able to link the strategies to concepts of Performance management.

Wednesday, August 4, 2010

Cabinet to consider List of Parastatals for Reform

State Enterprises and Parastatals Minister, Gorden Moyo, says he would be taking 10 underperforming state-owned enterprises (SOE)s to Cabinet to decide on the most viable recapitalisation option for every one of them.



Moyo also said the government decision-making board would also determine the fate of parastatals, which currently operate as both player and regulator.



Though the SOEs concerned would not be named, those frequently named include TelOne, NetOne, the Grain Marketing Board, Zimpost, the National Oil Company of Zimbabwe, the National Railways of Zimbabwe, Air Zimbabwe and the Zimbabwe United Passenger Company (Zupco).



“I will be taking each and every parastatal to Cabinet for ministers to decide on them on which one to privatise or commercialise,” Moyo said. “We will then have some parastatals have public private partnerships and others leased in order to recapitalise the state owned enterprises.”



Moyo said parastatals had potential to contribute about 40% to Gross Domestic Product, but have failed to measure up due to challenges related to funding and poor management.



According to a World Bank report, Zimbabwe’s state enterprises have very low volumes of sales and low revenue collections owing to structural bottlenecks, inefficiency and the economy’s liquidity crisis.



A greater proportion are also both under-funded and heavily indebted, which undermines their resuscitation.



“There is no single Act that I administer, this is a weak ministry in terms of teeth to bite. It doesn’t have any enabling teeth,” Moyo said, stressing that legislation dealing with state-owned enterprises should be reviewed to give the State Enterprises and Parastatals ministry more control over the institutions.



He said his ministry would propose a subsidiary law to translate Cabinet decisions on the parastatals into legal provisions.



A number of SOEs have been operating without boards for the past five years, while others have also failed to produce audited reports for close to a decade.



He also urged the enterprises to adopt good corporate governance practices to enhance their chances of attracting partners.



“It doesn’t cost a cent for parastatals to adopt a culture of good corporate governance. We cannot continue having a culture of leakages and continue paying ourselves huge salaries when the economy is bleeding.



“Close to 60% of our parastatals’ problems will be solved by good corporate governance practices,” said Moyo.


Story by Victoria Mtomba



















MOYO LAUNCHES TRANSITIONAL JUSTICE REPORT


BULAWAYO - Aug 04 2010 11:19

Communities in Matabeleland region want President Robert Mugabe to make a public apology for the Gukurahundi atrocities and to speak out on reparations people are demanding for victims of the “moment of madness”, the Zimbabwe Human Rights NGO Forum said in a report.

The outreach report, which is volume two of the document Taking Transitional Justice to the People, was officially launched by the Minister of State Enterprises and Parastatals, Gorden Moyo, in Bulawayo last Friday.

Titled, Who Will Dare Begin The Process of Recovering the Truth, the document sets out the experiences of the Zimbabwe Human Rights NGO Forum and its associates, who conducted outreach meetings in 51 constituencies to take the concept of transitional justice to the community.

It says the overriding plea of all participants was for “truth recovery and truth disclosure to redress the human rights abuses of the past and in so doing foster true national reconciliation’’.

According to the report, all the participants at the outreach meeting held in Nkayi agreed that those involved in the Gukurahundi massacres that took place in Matabeleland and parts of Midlands should apologise for the atrocities.

“President Robert Mugabe should come to the people and apologise for the massacres that happened in Matabeleland,’’ an elderly male participant said at the Nkayi meeting.

Participants also stressed that there could be no reconciliation if the truth on what happened during the Gukurahundi massacres is not acknowledged.


“There is no other way to reconcile the region of Matabeleland with the rest of the country if the truth of what happened during Gukurahundi is not known.Even for an apology to be accepted, it must be clear what is being apologised for,’’ reads the report.

The document also details how there was silence in the 1980s over the atrocities but explains that on March 16 1983, Catholic Commission for Justice and Peace (CCJP) representatives — Mike Auret, Bishop Henry Karlen and Bishop Patrick Mutume met with President Mugabe who was then Prime Minister and presented a comprehensive dossier of evidence of the atrocities which were committed by the Fifth Brigade in Matabeleland and the Midlands.



The evidence was collected by priests and missionaries who worked in rural Matabeleland and the Midlands.
A month later however, President Mugabe refuted the allegations and accused his critics of being “a band of Jeremiahs (which) including reactionary foreign journalists, non-governmental organisations of dubious status in our midst and sanctimonious prelates.’’


He accused the CCJP of condemning the Fifth Brigade and not the dissidents.

In January 1984, the government set up the Simplicius Chihambakwe Commission of Inquiry to investigate the atrocities but its findings were never made public.

When the Legal Resources Foundation set up shop in Lupane in 1984, it was inundated with enquiries from people wanting to obtain death certificates for heads of families who had “disappeared’’ in the 1980s and to enable children to get birth certificates so they could go to school and for other administrative purposes.
This prompted the foundation and CCJP to document the atrocities resulting in a report: Breaking the Silence, Building True Peace in 1987 which became the only published report on Gukurahundi.

The Human Rights NGO Forum report compiled this year says participants at the meeting in Bulilima were also concerned about the aftermath of Gukurahundi.



“The victims of Gukurahundi need to be rehabilitated. Some may need counselling because they have not been able to deal with the trauma. Where possible, the perpetrators must be made to pay for the damages and the pain they caused,’’ was one of the recommendations made by participants in Bulilima.



The report says the “arrogance of the leadership in failing to acknowledge past wrongs came out as a major obstacle to reconciliation’’.



About 20 000 people are believed to have been killed during the Gukurahundi atrocities

Thursday, July 8, 2010

PRESS STATEMENT BY HON. GORDEN MOYO, MP. MINISTER OF STATE ENTERPRISES AND PARASTATALS (Released on 7 July 2010)


Ladies and Gentlemen:


Our country is currently emerging from a full blown economic recession. We have had a decade-long economic dislocation and de-capacitation. For these reasons, the Inclusive Government has prioritized economic recovery and macroeconomic stabilization. Needless to say, the Ministry of State Enterprises and Parastatals has a responsibility of playing its part in turning around state owned enterprises.

I am fully aware of the responsibilities reposed on me and that of my Ministry. It is imperative for us as a Ministry, to remain focused on our mandate and responsibilities in order to play the crucial role expected of us. We need to constantly review our work and retrace our steps to ensure that we approximate as much as is possible to set goals.

Amongst Government of Zimbabwe’s foremost priorities, as outlined in the Government Work Programme (GWP), are the promotion of economic growth and the provision of basic services and infrastructural development.

The Ministry of State Enterprises and Parastatals is central in attaining these goals and hence the need to prepare for the huge task we have.

Let me take this opportunity to acknowledge the great work that my predecessors have done since the inception of this Ministry; first as a Department of State Enterprises in the Office of the President and Cabinet which eventually was constituted as the Ministry of State Enterprises and Parastatals. I would like to specifically mention my immediate predecessor Honourable Minister Joel Gabuza Gabbuza who did a sterling job during his tenure of office in the Ministry.

We shall build on the foundations laid by our predecessors guided by the conviction that State Enterprises and Parastatals (SEPs) are the engine room for the recovery of our economy. Our vision is to be a vibrant service centre for the promotion of total excellence in State Enterprises and Parastatals. This is an imperative that demands a serious reform agenda in the management of public enterprises.

In line with GWP, this Ministry has priorities that should be the focus in guiding our work and reforms. These include legislation for SEPs, restructuring, corporate governance framework, performance monitoring architecture and regulatory framework.

On the 6th of April Cabinet considered and noted the three broad based categories of restructuring, privatization and commercialisation as presented by this Ministry. It however underscored the need to proceed on a case by case basis with consideration for the state of affairs of each State Enterprises and Parastatal, the challenges faced, suggested turnaround strategies and the accompanying business plans before approval by Cabinet.

In this regard my Ministry is currently consulting with the relevant Line Ministries through the State Enterprises Restructuring Agency (SERA) notably Ministries of Agriculture, Mechanization and Irrigation Development; Industry and Commerce; Energy and Power Development; Environment and Natural Resources Management; Transport, Communications and Infrastructure Development; Finance and the Ministry of Public Service regarding the future of SEPs under their management. The objective of these consultations is to identify possible candidates for restructuring.

In that vein, my Ministry would like to see the State Enterprises Restructuring Agency (SERA) playing a leading role in all commercialization, privatisation and restructuring of state enterprises and parastatals in line with Government policy


On Corporate Governance, the Ministry has prepared a draft Framework for State Enterprises and Parastatals. The overall objective of the Framework is to provide guidelines for State Enterprises and Parastatals on matters of good corporate governance principles and best practices in the management of public entities.

Many of you will agree with me that as Government we should be an informed and active owner of SEPs with a clear, consistent and active economic policy. Government therefore would like to see the governance of state-owned enterprises being carried out in a transparent and accountable manner, with the necessary degree of professionalism and effectiveness.

Closely related to the restructuring priority is the Performance Monitoring Framework which is intended to provide efficient, cost effective and reliable mechanisms for monitoring the performance of SEPs. It will provide for the formulation of Key Performance Indicators and Targets agreed to by all key players. The doctrine of necessity demands that we do what is necessary. All these reforms should eventually yield the desired turnaround of the SEPs.

I am aware that SEPs should present quarterly, half-yearly and annual reports and the accompanying annual audited financial statements to my Ministry while those that are registered as private companies should have AGMs but few have been complying with these requirements. The Ministry shall insist on full compliance by all state owned enterprises.

Also, there is a need to review and standardize the regulatory environment governing the State Enterprises and Parastatals. For example, some SEPs do not have Regulators to control their operations while others are both regulators and players in one, thus defeating the principle of ‘separation of powers’ and checks and balances crucial for transparency and accountability.The net result is that the public suffers from poor service delivery.

My ministry shall be working towards banishing the unfortunate notion that public enterprises are associated with mismanagement and losses. Public companies must be competitive, efficient service providers and contribute significantly to wealth creation and poverty reduction. In concrete terms that means minimizing if not entirely eliminating underhand dealings and leakages that more often are responsible for bleeding the economy.

Some SEPs have under-performed in the recent past owing to the challenges such as undercapitalization, non adherence to corporate governance statutes, deterioration of infrastructure, huge debt overhang and limited access to lines of credit.As such most SEPs did not perform well last year and made losses as reflected in their profit and loss accounts for the year ended 31 December 2009.

The Ministry will therefore be working closely with the Ministry of Finance and line ministries to ensure that we overcome these challenges which are not insurmountable.

May I draw your attention to the observation that SEPs have been engines of economic growth in developed countries. Currently, developing economies like China, India, Brazil and even our neighbor South Africa have successful SEPs spearheading economic development and industrial growth.

There is absolutely no reason why we should not be counted amongst the league of these countries. However, to kick start the reforms our SEPs need an injection of capital. In our circumstances, we definitely need to partner with private sector as well as regional and international allies including multilateral institutions to ensure successful reform and restructuring of the public enterprises.

Thus, the future of SEPs is in their own hands though their capacity and progress depend to a large extent on supportive government and multilateral institutions – notably on issues of credit lines, technological transfer, trade and financial flows.

Finally, let me highlight on the importance we attach to professionalism and good work ethics. What as a Ministry we expect from SEPs, we should first demonstrate and therefore lead in by example. The values we enunciate in the Corporate Governance Framework for the SEPs should equally apply to us if we are to be a vibrant service centre for the promotion of total excellence in State Enterprises and Parastatals. Our hard work, diligence and commitment should be guided always by transparency, efficiency and professionalism.

May I conclude by thanking all staff members in the Ministry for hard work and perseverance during these challenging times. With continued commitment, diligence coupled with necessary cooperation and symbiotic relations with line Ministries, we should be able to stimulate economic growth in our country by increasing industrial production. We will also be able to entrench macroeconomic stability through the successful revitalization of State Enterprises and Parastatals. It can be done. We must do it.

I always like to call myself an Afro-optimist to emphasize my hope and optimism in us Africans.

Let us draw inspiration and wisdom from the Bible in Philippians 4:8 which I believe is appropriate for our situation in Zimbabwe:

‘Brethren, whatever things are true, whatever things are honest, whatever things are just, whatever things are pure, whatever things are lovely, whatever things are of good report; if there be any virtue, and if there be any praise, think on these things. And I will add, believe in such things, act on such things and do such things’.

Hon. Gorden Moyo, MP

Minister of State Enterprises and Parastatals

07th July 2010

Wednesday, June 23, 2010

Hon. Gorden Moyo re-assigned to new Ministry

Breaking News

Hon. Gorden Moyo MP, who until yesterday was the Minister of State in the Prime Minister’s Office, has been reassigned by the Prime Minister Morgan Richard Tsvangirai to the Ministry
 of State Enterprises and Parastatals.

Minister Moyo has been involved in monitoring the performance of Government Ministries and parastatals and trouble shooting through the Office of the Prime Minister. His new assignment is to deal with state enterprises most of which were on the verge of collapse in the last decade due to poor governance and lack of adequate funding.

Monday, June 14, 2010

Redefining coordination in Zimbabwe’s Inclusive government

The room is packed and the air of expectation is palpable. The buzz dies down when a flurry of activity announces the arrival of the guest speaker for the day. This is the Bulawayo Press Club and they have invited Gorden Moyo, Minister of State in the Prime Minister’s Office in Zimbabwe’s Inclusive Government. If there is one person who has intimate knowledge of its internal workings, it’s this man.

He is no stranger to this audience, this being one of many engagements with the press in Zimbabwe’s second largest city. Minister Moyo is also from this part of the country, having been a civil society leader of note.
It’s hard to imagine that only a few months ago, Gorden Moyo was an integral component of Zimbabwe’s restive civil society, now one of a few non-political appointees to the Inclusive Government and personally handpicked by Prime Minister Morgan Tsvangirayi. The fact that he works in the PM’s Office speaks volumes about his ability to deliver.

“I am an Afro-Optimist and I believe that the 21st century is Africa’s century,” the former executive director of Bulawayo Agenda, now Government Minister declares to the audience, telling them that the challenges that Africa faces, those of poverty, disease and conflict will be overcome. It is the same optimism that he exudes for the rest of the meeting.

The mandate of the Prime Minister’s Office under the Global Political Agreement (GPA) is to ensure that Government functions as efficiently as possible. This being the engine-room of the Inclusive Government, Moyo has no illusions whatsoever about the critical role he plays.

“Since we are an extension of the Prime Minister, we are directly responsible for policy formulation, coordinating the implementation of government programmes,” he says about his office that sets the legislative priorities of government and does most of the fire fighting.

Minister Moyo’s office is credited with the crafting of the innovative strategies that have lifted the country from economic ruin to one where business confidence is building up. The 100-day Plan, the Aid Coordination Architecture and the Government Work Programme are strategies through which the Office of the Prime Minister enables the efficient coordination of government thus inculcating a new culture of service delivery.

“Liberalisation measures adopted in 2009 that included the introduction of a multi-currency regime led to immediate changes such as macro-economic stability, fiscal discipline and stopping inflation in its tracks,” says Minister Moyo.

Hyperinflation was brought down from record figures put at 500 million percent by the World Bank to single digits, and business confidence returned to a country whose economy had hit rock bottom.
The challenges that Zimbabweans face are far from over as acknowledged by the Minister.

“Our biggest challenge at the moment is inflation. Food prices are rising along with public utility costs. Water and Electricity utilities along with local authorities are charging Zimbabweans highly when their salaries are unable to sustain all these expenses,” Moyo says.

He says that civil servants are right to demand better salaries but currently government did not have the money because of, among other things, the lack of fiscal space. Currently government was raising US$100 million compared to US$4.4 million raised in 2009. Up to 70% of this figure went into the salary bill leaving only 30% for other operations.

“Government cannot be run on this amount. Let’s raise the resources to meet salaries and until this happens, there can be no salary increase but cabinet is working on it,” Moyo assures the audience.

“An inter-ministerial committee headed by the Deputy Prime Minister Arthur Mutambara has been tasked with dealing with costs drivers that are eating into the meagre salaries of Zimbabweans. They are investigating the utilities that supply water, electricity and telecommunications services as well as rentals.”

“Another committee is looking at resource mobilisation to raise funds for capital development and salaries and is headed by Deputy PM Thokozani Khuphe. It will also ensure that minerals such as the Chiyadzwa diamonds and platinum benefit the nation and not just a few individuals,” adds Moyo referring to the controversial diamond mining activities that have contributed little to the fiscus.

The Prime Minister’s Office has also tabled a Drought Mitigation Strategy proposing a series of measures that will ensure that areas hard hit by drought this year would receive government assistance. The provinces of Matabeleland North and South, Masvingo and parts of Manicaland have been affected.

“The Government faces serious capacity challenges and we need other players and partners to come to our assistance. Zimbabwe needs mouth to mouth resuscitation,” Moyo says.

Currently, the Zimbabwe government has come up with an integrated policy response to the challenges emerging from the political and socio-economic areas. This is in the form of the Government Work Programme (GWP) another initiative originating from Minister Moyo’s office.

“The GWP succeeds the 100-day Plan that was launched in Victoria Falls by the Inclusive Government in March 2009. It is a management tool through which Government articulates the preferred priorities, enabling the Council of Ministers to focus on the strategic level and avoid micro-managing line ministries,” explains Minister Moyo.

It is expected to steer other policy frameworks that include the recently launched medium Term Plan, the Budget Macro Economic Framework and the 2010 Budget. Along with a complimentary Legislative Program, the GWP provides Parliament with an instrument by which Government is held accountable.

“The Government Work Programme was approved by cabinet on 9 March 2010 and the critical targets submitted came from the various line ministries. It’s a full government document that is coordinated through the Office of the Prime Minister,” Moyo says in answer to critics in Zanu PF who alleged that the GWP had not been approved.

This reflects the difficulties relating to the Global Political Agreement which Minister Moyo admits to the audience are a huge test for the Inclusive Government.

“People should realise that this is not a conventional government but rather a government by negotiation. There are bound to be disagreements on a lot of issues. A coalition is that of negative energies and turf wars abound because that is its nature. It’s not democratic but Government’s mandate is to come up with policy so we have to make it work,” Minister Moyo says.

Fielding a question from the floor on why the Inclusive Government was being paralysed by ‘outstanding issues’ in the GPA that never seemed to be solved, Moyo declares that there was nothing wrong with the Principals, President Robert Mugabe, Prime Minister Morgan Tsvangirayi and Deputy Prime Minister Professor Arthur Mutambara raising such issues and that there was no reason for anyone to lose faith.

“We will continue to fight for transformation and change. There is no room in government to lose faith. Issues of faith are issues for the pulpit. The GPA will have to come to an end because we need a democratically elected government and that is only when issues of transitional justice can be dealt with,” Minister Moyo says.

At the end of the meeting, one get the feeling that the journalists have somewhat got what they were looking for, an assurance perhaps that things were on track in the Inclusive Government despite signals to the contrary coming from the political camps and the state media. A rare insight into the workings of Zimbabwe’s coalition shows that there is a dedicated and hard working team that ensures that the government functions effectively, and that Minister Gorden Moyo makes sure this happens.