Friday, 8 May 2020

CHIWENGA TALKS TOUGH ON STATE ENTERPRISES


THE Government will enforce compliance of good corporate governance by State enterprises and parastatals to ensure they contribute meaningfully to the economy, Vice President Constantino Chiwenga said yesterday.

Government, he said, should consider shutting down State enterprises that were no longer strategic or of national importance.

Some enterprises had failed to submit financial statements for the past 10 years despite strict rules in the Public Finance Management Act and the Companies Act if they are a private limited company with the State as sole shareholder or their original founding Act.

Addressing a defence course at the Zimbabwe National Defence College in Harare yesterday on the role of parastatals and State enterprises in enhancing national security and achievement of Vision 2030 , VP Chiwenga said some State enterprises were still operating without a board charter or code of ethics.

“State enterprises should be subjected to effective oversight and compliance enforcement in order to maximise their contribution to the competitiveness and development of the Zimbabwean economy, as well as enhance its security architecture,” said VP Chiwenga.

“While there was a marked improvement in the number of state enterprises complying with the provisions of the Public Finance Management Act, on submission of financial statements for audit, those that did not submit remain a cause for Government concern.

“In the worst case, we still have some State enterprises that have not been submitting the financial statements for the last 10 years. Certainly, Government will quickly move in and enforce compliance as required by the law.” 

VP Chiwenga said some entities were operating for an extended period without full boards and it was observed that some chief executive officers of these institutions were more accountable to line ministers than to the board of directors.

He said strong State enterprises were key to the country’s efficient allocation of resources and economic development.

“It is worrying that the economic performance of some State enterprises in Zimbabwe has deteriorated to unacceptable levels,” said VP Chiwenga.

“It calls for decisive action to turn them around or close them, if they are no longer of strategic national significance.

“The new dispensation is determined to ensure that State enterprise reforms are successfully undertaken in the shortest possible time for the good of the economy. The supervision of State enterprises by the Government will therefore be strengthened to ensure that their performance enhances rather than undermines national security conceived from both a traditional state-centric and contemporary human security perspective.”

VP Chiwenga said Government had created a database for all individuals who were already board members and those seeking to sit on boards of state enterprises managed by the Corporate Governance Unit.
He said the database was linked to the Office of the President, ministries, departments and agencies to make it easy and faster to identify potential members for any  board.

VP Chiwenga said there were some state enterprises that continued to rely on direct or indirect support through subsidies, recapitalisation or guarantees. Herald

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