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Published: August 13, 2010
There has been a lot of hullabaloo since the announcement by the new Minister of State Enterprises and Parastatals, Honourable Gorden Moyo that Parastatals should regularise and trim salaries and allowances of senior management that have been characteristic of the brazen economic recklessness, financial imprudence and a general disregard of the basic principles of corporate governance in the State Enterprises and Parastatals. The concern for the progressives is on how these Parastatals, plundered and siphoned for nearly three decades, and to that extent prevented the economic growth of the country could, all of a sudden, bounce back to life, thrive and put the economy on course to recovery. The following is a synopsis of the problems that bedevil Parastatals and needs the minister’s immediate attention:
Using the politics of cooptation and patronage the government has been able to contain and curtail the operations of military officers. Leading members of the security forces were employed by the state to the Parastatals that have been used as retirement zones. This has been done at the expense of professional organisations and individuals who could have provided intellectual and intelligence services to the country. The favours have however not been distributed within the hierarchy and file of the security forces. Only senior officers who risk their lives to protect the regime and those who unapologetically support the status quo are rewarded by political appointments to various boards. These explain why senior security officers have replaced competent and better trained civilian personnel as board members and Chief Executive Officers of various parastatals. The extreme sustained and systematic militarisation has been further extended by the appointment of retired army personnel into the positions of permanent secretaries, directors and CEOs, case reference being ministries such as the ministry of Industry and International Trade, Ministry of Energy and Power Development, Ministry of Construction, National Railways and the Commercial Bank of Zimbabwe. The direct result has been the drastic altering of the institutional and financial purview of these parastatals. There is need for the reduction of the extent of military penetration and the achievement of a more equitable professional and political distribution of portfolios.
The pacification of senior security personnel, the resultant frivolous donations by the very same appointees to many futile government activities, the many none profit making ventures by parastatals, the utter disregard of the concept of corporate governance, the creation of many subsidies and other such structures and companies have all been meant to facilitate the looting of the public purse. Besides rewarding themselves lofty salaries, senior executives of parastatals have gone to the point of forming shelf companies to trade with parastatals they lead. As a result the parastatals in the country have been a miniature of the endemic corruption that currently wreaks havoc throughout the country.
The government, through successive ministers has been busy experimenting ill-defined turnaround programmes which did not seek to make the parastatals viable and productive but sought to consolidate the hegemonic interests of a few political vultures. The interplay in the parastatals has resulted in the consolidation of personal political machines at the expense of expediency and efficacy. The government has removed competent people as heads of parastatals or in boards over policy disagreements and appointed mediocres who are able to sing for their supper in their place. As a result most of these parastatals are in deep throes of managerial ineptitude.
It is therefore obvious that the parastatals are failing the country as a vehicle for development of the Zimbabwean political economy. Unfortunately their failure has a ripple effect as they are expected to also act as enablers of other sectors of the economy. For instance the failure of ZESA impacts negatively on other sectors like agriculture and industry. Against that background, arguments that the action by cabinet, pushed by the Minister of State Enterprises and Parastatals will lead to massive brain drain are as hollow as they are shallow. It is clear that in appointments of boards and Chief Executive Officers, the state sought to neglect its duties, social responsibilities and therefore created incalculable hardships to the people of Zimbabwe through massive cut down of workforce and failure to deliver services. The recourse by the Minister to a series of austerity measures is welcome and the Minister needs to do more if the state enterprises are to be viable again. Below is a summation of possible interventions;
The interventionist military in Zimbabwe is a symptom, not the cause of Zimbabwe’s malaise. One of the most effective reform measures with regards to leadership of state enterprises is through professionalization. The government through the Minister in charge of Parastatals and line ministries has a duty to deal with aberrant parastatals heads who, more often than not, are political in their stance and public perception. Legal provisions to make sure that appointments to parastatals, promotions and disciplinary control are dealt with on a continuous standard of detached impartiality and fairness, uninfluenced by political changes or pressure should be put in place. In carrying out recruitment to and promoting deserving candidates in the parastatals, merit and not patronage based on partisanship and nepotism should be used.
Reform provisions for public accountability and transparency should not only result in an ethical reorientation of the boards and executives of parastatals but should also provide strong leanings for which viable economic and democratic processes must rest. The reforms require the minister to expose these parastatals heads to public scrutiny through institutions of accountability like parliament and consultative meetings by interest groups. Furthermore a potent professional audit committee should be instituted to raise alarm on any glimpses of questionable behaviour. Audits should be ongoing, sporadic and results made public.
However there are other enterprises whose failure to operate effectively can be directly located in the doorstep of the government. The inability of the state to fund these enterprises combined with the leadership failure in these parastatals has meant that Zimbabweans have to grapple with the twin problems of service delivery failure and non employment generation. Privatisation will therefore reduce the state’s fiscal burden and at the same time create employment. For instance NRZ at full capacity can employ 8 000 people but everybody knows that under government it can never be at full capacity. There is need for government to look into all the parastatals and determine which ones are worth maintaining.
Performance based Contracts
Part of the reforms in the Parastatals should include the introduction of performance based contracts. The performance of the heads of these institutions should be scrutinised by institutions of accountability such as parliament and these should always precede promotion or extension of contracts.
The Zimbabwean government under the transitional government is bedevilled by a host of problems and most of these can be located within the economic compendium. Parastatals therefore have a pivotal role to play in resuscitating the ailing economy. The Parastatals are experiencing an avalanche of problems in their chequered history. The relationship between the state and the people is tenuous as these Parastatals fail to provide basic services. The inclusive government therefore has the onus of making sure that Parastatals are viable effective, responsive and accountable. The minister will be judged not on what he would have done to make sure that its business as unusual.