Parastatal revival keynote for production boost

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Prosper Ndlovu, Business Editor
THE coming in of a new Government led by President Emmerson Mnangagwa has kindled hope for economic recovery in Zimbabwe after years of stagnation.

The demise of key economic players, mainly public enterprises like the Cold Storage Company (CSC), the National Railways of Zimbabwe (NRZ), Hwange Colliery Company and Ziscosteel, is embedded in the dark economic past, which the incumbent leadership should thrive to transform.

President Mnangagwa, in his inauguration speech last Friday, set the tone towards a long-desired paradigm shift, with a focus on turning around the economy and creating jobs, jobs and jobs. Aggressive economic transformation is what this country has been waiting for and the time is now for those in charge to walk the talk, with the blessings of the Head of State.

Critical in this matrix is the revival of CSC, NRZ, Hwange Colliery and Ziscosteel, which ceased operations in 2008. The downstream economic impact of these entities is not up to debate. Their productive and employment capacities make them deserve priority if the new Government is to turn around the economy. This is critical for Bulawayo too, which has suffered the brunt of de-industrialisation in the last decade and Matabeleland region at large whose citizens lost jobs.

It is, therefore, imperative for the new Government to engage the private sector associations and individual companies in a substantial dialogue to revive these ailing entities and entice fresh investments across the country’s economic sectors. Zimbabweans and Bulawayo in particular are pained by the decaying state of CSC and NRZ infrastructure. While positive investment proposals have been put on the table, implementation of these turnaround strategies has tended to take long or fail altogether.

The $400 million deal with DIDG/Transnet of South Africa, for instance, has been a flip-flop affair, having once been reported as dead in the water in September this year only to be revived recently. To date it is not clear when implementation will start with those in charge saying financial closure could be around mid-2018. A similar experience is true of Ziscosteel, which saw a collapse of the $750 million Essar deal in 2015. It is not clear when the new $1 billion Zisco/Chinese deal will be implemented.

Hwange Colliery has also been shrouded in the mystery of alleged mismanagement with a series of Government support measures failing to yield break even. In the case of CSC, a lot of pointers indicate the parastatal has huge potential to contribute meaningfully to the economy given its strategic value chain bearing in the manufacturing industry and the broader livestock sector.

Sadly, there seems to be lack of urgency, neglect and slow response to addressing the plight of CSC and others and positioning these back to profitability. It is disappointing that the appointment of a new CSC board led by Mrs Sylvia Khumalo Jiyane in April this year has not made any difference. While the National Social Security Authority (NSSA) has pledged $18 million investment to turn around the parastatal, the CSC board and management have not said anything or been seen doing some action for the past seven months.

Will there be a difference in this narrative under the new Government?

Last year reference was made to the collapse of a $57 million potential investment for CSC and to date there is no clarity on the fate of another $80 facility that was hyped up in 2016. Parliament is on record bemoaning lack of collective responsibility between the board and the Ministry of Agriculture, headed by former minister, Dr Joseph Made who was supposed to give policy direction in line with section 31 (1) of the Cold Storage Commission Act. Saddled with a legacy debt of about $30 million and litigation cases by creditors that have resulted in loss of critical assets, CSC has lost its capacity to compete with private players to bring sanity in the marketing of meat and related products on the market. CSC’s demise has given birth to the rise of a cartel that comprises family owned businesses with self-serving interests that manipulate desperate livestock farmers to sell their cattle on sub-economic prices.

Nonetheless, CSC, NRZ, Ziscosteel and Hwange Colliery still have potential to create more jobs and wealth along their respective value chains. Their resuscitation will be a big win for the Government’s Zim-Asset. As President Mnangagwa pointed out, this country requires a different work ethic, a move away from bureaucratic slothfulness.

“Our people have endured economic hardships for over two decades, and now expect this Government to turn things around within the shortest time possible. Let us take advantage of the positive optimism among our people, ushered in by this new dispensation, and do our best,” President Mnangagwa told heads of ministries and permanent secretaries in Harare Tuesday.

He stressed the need for administrators and public officials to adopt a high performance work ethic with a focus on growing the economy.

“Our prime focus thus should be on the implementation of practical solutions to grow our economy, create jobs and boost the incomes of our people,” said President Mnangagwa.

“My Government will have no tolerance for bureaucratic slothfulness, which is quick to brandish procedures as an excuse for stalling service delivery to the citizens, investors and other stakeholders. Our mantra should be peak performance, peak performance and peak performance.”

This reality emphasises the need to hasten investment reform processes to weed out doing business constraints and consolidating growth of surviving factories. Resolving these issues can provide a boost to the manufacturing industry as a whole, households, and local and national budgets as inefficiencies are worked out. The revival of state enterprises would not only energise the entire local production volumes and create jobs but will absorb the informal players and ensure more deals are conducted through formal channels.

It is within this context that capacitating strategic enterprises with a downstream effect on the economy should be given adequate attention. It is high time that the work ethic in the key players be changed and all efforts be put towards delivering a dividend of improvement to the public. This also entails weeding out corruption, engaging competent management and rewarding personnel on the basis of skill, knowledge and performance.

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