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
