EDITORIAL CONTENT: Codifying parastatal governance spot on

EDITORIAL CONTENT: Codifying parastatal governance spot on
President Robert Mugabe

President Robert Mugabe

GOVERNMENT deserves some credit for finally moving to enact a law to give teeth to its rules on how public entities are run.
The efficient management of statutory bodies, parastatals and State-owned commercial enterprises is integral to economic growth and development.
State enterprises and parastatals make up approximately 14 percent of Zimbabwe’s gross domestic product (GDP) and employ an estimated 40 000 people.
These public entities also play an enabling role for the rest of the economy, by providing essential services in the agriculture, energy, water, mining, communications and transport sectors.
Their importance can never be overstated, nor can we ignore how their egregiously poor management has contributed to the current parlous state of the economy.
Each year, Treasury doles out hundreds of millions in salaries to public entities which have racked up losses running into billions of dollars since 2009.
Annually, the auditor general reports on poor governance structures, weak financial controls, ridiculously high allowances and wanton waste in the few public enterprises and parastatals that bother to submit to audits.
Government, whose ministers and senior officials are often complicit in the rot, has not shown any inclination to take action over the auditor general’s findings and recommendations.
Even the shocking revelations three years ago, that executives in some loss-making public entities were getting paid exponentially better than their counterparts running profitable private businesses, only drew a feeble reprimand from government.
Attempts to cap the executives’ remuneration were disregarded.
A National Code on Corporate Governance, launched in 2015 mainly in response to the parastatal malfeasance, has remained largely unenforced.
All this could soon change, following the publication, last week, of the Public Entities Corporate Governance Bill.
Among other provisions, the proposed law seeks to limit chief executives of public entities to a maximum 10 years service — two terms of five years each.
As we report today, some veteran chief executives who have already served for a decade or more could be out of employment six months after President Robert Mugabe signs the law.
The law would also not allow anyone to serve on more than two boards at a time.
Permanent secretaries, some of whom were one-man boards until recently, will no longer sit on parastatal boards.
Boards and management would also be required to declare assets upon appointment, draw up strategic plans and would be tied to performance contracts.
The Bill also proposes to regulate executive pay and strengthen the role of a corporate governance unit, within the Office of the President and Cabinet, operating under a governance tsar at the level of a permanent secretary.
The proposals sound good, but good plans have never been our problem.
The inability to implement and stick to the rules is.
As the Bill now goes through the mandatory one month of public consultations, citizens, who ultimately pay for the mismanagement of State enterprises and parastatals, either directly through taxes or indirectly through suffering poor service delivery, need to step up and strengthen the proposed law.

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