Need for State Enterprises Reforms In Zimbabwe

State Enterprises and Parastatals (SEPs), if properly managed and operating within the confines of good corporate governance framework can contribute about 40% of the country's GDP.However as is the situation now,most of the SEPs (about 90%) are perenial loss makers,no withstanding the fact that most get weekly handouts from Treasury.

The introduction of the SEPs corporate Governance framework late last year has not solved matters,because the Boards ,Management and other stakeholders were merely lectured on  the document ,but no follow up workshops has been conducted for them to have an appreciation of the document.

The disbursements of funding ,either for capitalisation,or operational finance have drained the fiscus at a time when there is little fiscal space.The revenue streams for the government are much lower that their required outturn,month in and month out.The continued funding of parastatals will stall growth and infrastructural development aspects of the state.There is therefore need to wean SEPs from the National Budget and link up when it comes to Public Sector Investment Projects ,which most of these play  an integral part.

 Strategic SEPs like Zesa,Zinwa,Air Zimbabwe and NRZ  have failed to deliver on their mandate i.e the provision of service to the general populace,firstly due to unrealistic tariff structures,poor management of entities and corruption among other issues.This then neccesitates the need to reform SEPs and curtail the continued deterioration of the various infrastructures which are managed by these entities.

In 2010, the Government approved the catergorisation of SEPs into three broad categories of Privatisation,Commercialisation and restructuring.The government dilutes its shareholding in some of these parastatals by way of seeking strategic partners and /or listing the entities as a way of privatisation. There are also other ways of transferring government shareholding to private investors like Join Ventures,creation of employee ownership scheme or total management buy outs.The last one however is least likely to happen because of the nature of most of the SEPs in Zimbabwe.

The transformation of the operations of some entities from being bureaucratic and conservative to being innovative and entrepreneurial is called commercialisation. Commercialisation emphasizes the following elements among others: cost recovery and reduction, corporatisation, innovation, commercial awareness, adaptability to the market and viability.

Restructuring entails the various ways of ensuring that the entities are turned around without changes in the operational models or modalities.It also refers to the actions which could be initiated in trying to change the modus operahendi of the entity hence