Government moves to tighten grip on State firms

Source: Government moves to tighten grip on State firms – herald

Nelson Gahadza

Senior Business Reporter

GOVERNMENT is moving to tighten oversight of State-owned enterprises and parastatals, with a new national policy that is expected to impose clearer performance targets, strengthen accountability and streamline ownership arrangements.

The proposed National State Enterprises and Parastatals (SEPs) Policy will provide a common framework for ownership, governance, financing and performance management across the sector.

The policy is also expected to give greater clarity to the Government’s ownership model, under which commercial State enterprises are being centralised under the Mutapa Investment Fund (MIF), while non-commercial entities remain under the relevant Government ministries.

Deputy Chief Secretary in the Office of the President and Cabinet, Dr Willard Manungo, in a speech read on his behalf by Chief Director Mrs Anna Tinarwo at a stakeholder validation workshop on the development of the policy in Harare, said the policy was critical to ending the fragmented approach that had characterised the management of State enterprises over the years.

“The development of a National SEPs Policy is, therefore, not an academic exercise; it is a strategic imperative,” he said.

The policy is being developed at a time when the Government is intensifying efforts to transform State enterprises from entities that consume public resources into commercially sustainable institutions capable of contributing meaningfully to economic development.

For years, many SEPs have faced financial and operational difficulties, with governance shortcomings, weak performance and reliance on Treasury support placing pressure on the fiscus.

Dr Manungo said the sector’s challenges were rooted partly in an absence of a coherent national framework.

“Zimbabwe’s SEPs landscape has, for too long, been characterised by overlapping mandates, misaligned policies, and fragmented legislative instruments.

“These structural deficiencies have collectively contributed to underperformance by many SEPs and exposed our nation to significant fiscal risk,” he said.

The Auditor-General’s reports have also consistently highlighted governance deficiencies and financial mismanagement within public entities, while a number of State enterprises continued to require Government financial support.

“The Auditor-General’s reports over the years have painted a consistent picture of governance deficits, financial mismanagement and a troubling dependence on Treasury bailouts,” Dr Manungo said.

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