1. Government has been consistent in emphasizing the
critical contribution expected from the State Enterprises and Parastatal (SEP)
sector towards the revival of Zimbabwe’s economic fortunes and in this regard
has for some time been pursuing a programme of SEPs reform designed to enhance
performance, improve service-delivery and to bring more order, discipline and
rationality to the sector as a whole. This includes (i) promoting good
corporate governance in the SEPs sector, (ii) undertaking an overall Strategic
Portfolio Review, (iii) individual SEPs Performance Reviews and, (iv) conducting
Forensic Audits where the need arises in some SEPs.
2. The 24th November, 2017 Inaugural Statement and the more
recent State of the Nation Address delivered by His Excellency, the President,
Cde. E.D. Mnangagwa, together with the 2018 National Budget have served to
inject additional weight and greater urgency to this programme of reform, and
have underlined the need for Government to significantly accelerate development
of a SEPs Short and Medium Term Reform Framework (SEPs-SMTRF) that would guide
the implementation of the National SEPs Reform Framework.
3. This Framework has been developed by the arms of
Government mandated to oversee SEPs governance, performance and reform, namely
the Corporate Governance Unit (CGU) within the Office of the President and
Cabinet (OPC), the Ministry of Finance and Economic Development and the State
Enterprises Restructuring Agency (SERA) on the basis of a comprehensive
diagnostic analysis of the overall sector.
4. In order to facilitate this task and so as to lay a
sound, evidence-based foundation on which to conduct the analysis and to
develop effective reform strategies, the Office of the President and Cabinet
(OPC) issued Cabinet Circular No 19 of 2017, which directed Line Ministries to
produce detailed self-assessment and proposed turn-around strategies for all
SEPs under their respective purview.
5. Line Ministries have since responded to this directive,
providing relevant data which, in turn, has used to develop a memorandum
recommending State Enterprises Reforms. The Memorandum was considered by
Cabinet on the 10th of April 2018and came up with the following decisions:
Table A: State Enterprises and Parastatals whose Reform
Initiatives are already at various stages of Implementation
Name of Parastatal Decisions of Cabinet
1. Cold Storage Commission (CSC) Finalise consideration of
joint venture proposals by the Swiss and United Kingdom investors by 30th April
2018
2. Grain Marketing Board The Grain Marketing Board is
expected to complete work on delinking the Strategic Grain Reserve and the
GMB’s commercial operations.
The Grain Marketing Board will continue to manage the
Strategic Grain Reserve on behalf of Government.
All costs directly related to the management of the
Strategic Grain Reserve will be borne by Government.
The expenses will include storage costs which will be
provided for under the fiscus.
3. Agriculture and Rural Development Authority (ARDA)
Proceed on current trajectory with identified strategic partners.
4. Civil Aviation Authority of Zimbabwe (CAAZ) Promulgation
of the Civil Aviation Amendment Bill to provide for the unbundling of the
authority into a Regulatory and Airports Authority
5. National Railways of Zimbabwe (NRZ) Current
recapitalisation Programme to proceed
6. Zimbabwe Electricity Supply Authority (ZESA) A single
ZESA Board will be established to take charge of ZETDC, ZPC and ZESA
Enterprises.
The Boards of ZETDC, ZPC and ZESA Enterprises to be
dissolved.
The Board will be allowed to engage strategic partners
under ZPC operations where necessary.
The strategic and ZESA-specific activities of Powertel will
be incorporated under ZETDC whilst excess telecommunication capacity will be
included in the merger between Zarnet and Africom.
7. Zimbabwe National Road Administration (ZINARA) The
Zimbabwe National Road Authority will remain under the Ministry of Transport
and Infrastructure Development but with a focus on revenue collection and not
on technical road construction activities.
The Ministry is challenged to ensure that there is improved
transparency and accountability in the operation of ZINARA
8. Allied Timbers To seek strategic partner
9. Agribank To seek strategic partner
10. Small and Medium Enterprises Development Corporation
(SMEDCO) To be merged with Empower Bank and establish the Empowerment and
Development Bank that will have a unit focusing on small and medium scale
enterprises and Youth Development programmes.
A separate Women’s Bank to be established.
11. Forestry Commission To remain as a regulatory authority
12. ZISCO Steel Current efforts to resuscitate it to
proceed
Table B: State Enterprises Targeted for Liquidation
Name of Parastatal Decisions of Cabinet
1. National Glass Industries To be liquidated
2. Motira To be liquidated
3. Zimglass Given the world wide movement towards the
replacement of plastics with glass, National Glass is expected to urgently seek
a strategic partner as IDC retains its current shareholding in the company.
The identification of a strategic partner is urgent as the
company currently faces litigation that could lead todissolution or liquidation
4. Kingstons (Pvt) Ltd To sell/dispose of its assets but to
retain its two Radio Licences.
The Line Ministry should seek ways of maximising the
company’s interests in the radio licences Capital Radio and Nyaminyami FM
Table C: State Enterprises Targeted for Privatisation
Name of Parastatal Decisions of Cabinet
1. The National Handicrafts Centre No privatisation. To be
transferred to Ministry of Women Affairs, Gender and Community Development for
market promotion
2. Allied Insurance IDC should retain its current 10%
interest in Allied Insurance
3. Surface Investment To retain current shareholding at 10%
in the national interest
4. Zimbabwe Grain Bag To be privatised but IDC to retain a
percentage of the strategic bag company in the national interest
5. Ginhole Investments To be privatised
Table D: State Enterprises and Parastatals Targeted for
Partial privatisation through engagement of Strategic Partners and/or Listing
on the Zimbabwe Stock Exchange
Name of Parastatal Decisions of Cabinet
1. National Handling Services No privatisation
2. Petrotrade Government to retain majority shareholding in
the national interest
3. ZIMPOST Partial privatisation
4. POSB Partial privatisation
5. 17 ZMDC Subsidiary Mines: Jena, Sabi, Elvington, Golden
Kopje, Alaska Mine, Mhangura, Sanyati, Kamativi, Lutope, Kapata, Sandawana, Lynx,
Mumburume, Shabanie, Gaths Mine, Mbungu and Gwayi Partial privatisation
6. Infrastructure Development Bank of Zimbabwe (IDBZ)
Partial privatisation
7. Road Motor Services (RMS) To be privatised in tandem
with NRZ Programme
8. Tel-One, Net-One and Telecel Partial privatisation
9. ZUPCO Partial privatisation
10. Willowvale Mazda Motor Industry Partial privatisation
11. Chemplex Corporation Partial privatisation through a
strategic partner that can ensure the provision of fertilizers to the country
at affordable prices.
12. Deven Engineering Partial privatisation
13. G & W Minerals Partial privatisation
6. Where partial privatisation is to take place, Government
will explore opportunities for using the Stock Exchange to promote involvement
and ownership by the public/population through share ownership schemes.
Table E: State Enterprises and Parastatals earmarked for
Mergers
Name of Parastatal Decisions of Cabinet
1. SMEDCO, Empower Bank and Women’s Microfinance Bank
SMEDCO and Empower Bank to be merged into Empowerment and Development Bank.
Women’s Microfinance to remain as a separate Bank.
2. Powertel, Zarnet and Africom Merge
3. Competition and Tariff Commission and National
Competitiveness Commission No merger. Competition and Tariff Commission remain
as it is. National Competitiveness Commission to become a Department in the
Line Ministry with the support of the private sector
4. Postal and Telecommunication Regulatory Authority of
Zimbabwe (POTRAZ) and Broadcasting Authority of Zimbabwe (BAZ) Merge
5. The Boxing and Wrestling Boards Merge
6. Special Economic Zones Authority, the Zimbabwe
Investment Authority, Zimtrade and the Joint Venture Unit The Special Economic
Zone should be merged with the Zimbabwe Investment Authority, Zimtrade and the
Joint Venture Unit to establish a One Stop Shop for potential business
investors
Table F: State Enterprises and Parastatals to be Absorbed
as Ministerial Departments
Name of Parastatal Decisions of Cabinet
1. New Ziana To become a Department in the Ministry of
Information, Media and Broadcasting Services
2. National Indigenisation and Economic Empowerment Unit To
become a department in the Ministry of Industry, Commerce and Enterprise
Development
3. National Arts Council To remain as a regulatory
authority
4. National Library and Documentation Services To become a
Department in the Ministry of Primary and Secondary Education
5. National Liquor Licencing Authority To be returned to
the Ministry of Local Government, Public Works and National Housing as a
regulatory authority
6. Board of Censors To become a Department in the Ministry
of Home Affairs and Cultural Heritage
7. Lotteries and Gaming Board To become a Department in the
Ministry of Home Affairs and Cultural Heritage
7. Cabinet resolved that all Research Institutes will
remain as they are.
8. Detailed implementation modalities for each of the
Cabinet decisions willbe provided in the form of a Memorandum to Cabinet by each
respectiveLine Ministry, including indications, where relevant or necessary,
for theengagement of technical, financial or legal advisors in order to
facilitatethe reform or restructuring process agreed by Cabinet.
Hon. P.A. Chinamasa, MP
Minister of Finance and Economic Development
12 April 2018
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