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
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