Shame parastatals with poor corporate governance, says Chinamasa

Shame parastatals with poor corporate governance, says Chinamasa
Minister of Finance and Economic Development, Patrick Chinamasa

Minister of Finance and Economic Development, Patrick Chinamasa

By Nyasha Chingono

MINISTER of Finance and Economic Development, Patrick Chinamasa, says parastatals with poor corporate governance must be shamed as they are burdening Treasury with huge debts while contributing little to the fiscus.
Chinamasa said poor financial management had become common in the country’s public enterprises. Government, he said, was contemplating weaning some parastatals to avoid over dependence on Treasury.
“We should not shy away from shaming those parastatals, which are guilty of poor corporate governance,” Chinamasa told delegates at an awards dinner last week in the capital.
“A well-functioning public sector is crucial, especially in such an environment (as ours) but sadly public sector performance continues to be unfavourable. This is due to poor corporate governance, limited financial resources and poor financial management that has culminated into huge debts…They want us to inherit debts, not assets,” said Chinamasa.
Chinamasa urged parastatals to come up with strategies to sustain their own operations without relying on Treasury, which is also burdened by high employment costs that gobble 90 percent of the national budget.
“I’m looking forward to the day when our State enterprises start to play a meaningful and developmental role without coming to treasury for financial support. We should move away from our self-centered behaviour into a more transparent behaviour,” he said.
State enterprises have increased in number from about 20 at independence to 107. Of the 107, only 43 are wholly commercial enterprises.
“I would like to call upon parastatals to reduce recurrent expenditure and unsustainable employment costs. Most of the resources are going to unsustainable employment costs and very little towards service delivery,” said Chinamasa.
To reduce corruption and improve financial management, parastatals are now required to produce audited financial statements and hold annual general meetings.
Chinamasa said most of the public enterprises were complying with the new requirement.
Poorly performing entities, with huge potential to be profitable and self-sustaining, have run up over $1 billion in losses since 2009 and continue to rely heavily on taxpayer funds.
A Public Entities Corporate Governance Bill, which was gazetted a fortnight ago, seeks to improve the management of parastatals, statutory bodies and government-owned or controlled commercial entities.
A report by the auditor general, Mildred Chiri, said fringe benefits in most public enterprises were processed outside the payroll and not subjected to tax. Parastatals caught on the wrong side were Zimra, Civil Aviation Authority of Zimbabwe, Zimbabwe National Roads Administration, Mineral Marketing Corporation of Zimbabwe and National Museums and Monuments.

Connect With Us

Fingaz Polls

Can Emmerson Mnangagwa revive Zimbabwe's economy?