Seven parastatals set for privatization in Zimbabwe

Seven parastatals have been earmarked for privatization and restructuring as the Zimbabwean government continues to seek ways through which public enterprises can help in the economic turnaround, local newspaper The Herald reported on Monday.

Most of the state enterprises in Zimbabwe have been a burden on the fiscs as they are always holding out the begging bowl after failing to blot the red ink on their accounts books.

Apart from the seven identified public enterprises, it is also expected that the government would divest some of its shareholding in other companies.

This would see the government raising more revenue, especially foreign exchange, and at the same time allowing indigenous participation in various sectors of the economy.

When presenting the 2006 budget, Minister of Finance Herbert Murerwa said the government had earmarked at least seven parastatals for restructuring and privatization.

But in doing so he ruled out the wholesale disposal of the government equity in the enterprises.

"The government has decided on the restructuring of some of the public enterprises through strategic alliances and joint ventures, that facilitate the injection of additional equity capital, as well as access to modern technology," Murerwa said.

Zimbabwe Power Company, TelOne, NetOne, the National Railways of Zimbabwe, Zimbabwe Iron and Steel Company, Air Zimbabwe and Cold Storage Company have been identified for restructuring.

Privatization of state enterprises started in the early 1990s under the first phase of the Economic Structural Adjustment Program.

It was, however, halted about six years ago when it became apparent it was not yielding the desired results. Privatization was part of liberalizing the economy as orthodox economists pushed the state to adopt a "hands-off" attitude to critical services.

This, however, came at a cost as there were no measures to protect the poor and vulnerable in society.

It was in this spirit that the government decided to restructure parastatals so that they operate on commercial basis while at the same time ensuring the poor and vulnerable were not sacrificed on the altar of privatization.

Source: Xinhua