Government to close down underperforming parastatals


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The government will close down underperforming parastatals and will take tough action on local authorities which do not adhere to the rule that salaries should not exceed 30 percent of their budgets, Finance Minister Patrick Chinamasa said.

 “(Parastatals) used to contribute 40 percent to GDP. Right now, every day, we are being called upon as Treasury to support them. We need to get our act right in terms of State enterprises reform,” he said at a pre-budget seminar in Victoria Falls on Monday.

“It is in this area that we are going to need the support of all of you. We need to revamp our State enterprises and to do it in a very bold and sometimes ruthless manner. We should not hesitate to put under those parastatals we think are no good to us. That is where we have been lacking some degree of boldness. Tirikunyarana, we should be able to say, ‘you are not performing, please get away, we are closing shop, enda kumba kwenyu’,” he was quoted by The Herald as saying.

Chinamasa said a similar stance will be taken on local authorities that do not adhere to the 30 percent ceiling of revenue going towards salaries.

State enterprises will be required to hold annual general meetings from next year, where non-performing boards or management could be sacked through a resolution.

“It is the platform where we can dismiss boards of directors through a resolution. We can also use that platform, if there is no performance by management; we pass a resolution to dismiss them.  Once they know we can dismiss them, they will certainly be on the ball and that is what I think we need all of us,” Chinamasa said.

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The Insider

The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

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