Government has tightened screws on under-performing state entities saying those deemed to have outlived their usefulness will not be bailed out.
Addressing a Stakeholders Workshop on Enhancing State Enterprises, Finance and Economic Development Minister, Dr Ignatius Chombo said President Mugabe was correct in expressing his frustration on under-performing state entities when he held an interface meeting with the private sector in August.
“In response to the President’s remarks, all ministries were directed to provide up-dated status-reports on all State Entities within their respective portfolios,
“These reports were to have details like, the strategic importance of the Entity, the sustainability of the Entity’s operations Or should the Entity simply be closed-down or possibly absorbed into the Line Ministry as a Department,
“The same directive to Ministries stipulated that, in cases where the Line Ministries are convinced that their Entity can be turned-around, they should provide details of the proposed turn-around strategies and provide clear sources of funding for that turn-around,” said Chombo.
“Relevant Heads of Ministries together with the respective Management structures of the Entities which fall under them are advised to devote more time and attention to fulfilling the terms of that directive,” added Chombo.
The former Home Affairs and Local Government Minister said directing scarce resources into restructuring and recapitalizing potentially salvageable state entities will not work if wasteful habits of management are not addressed.
“As noted previously published Corporate Governance Frameworks and Codes have not been taken seriously, and in order to emphasize its seriousness of intent in this regard, government has developed the Public Entities Corporate Governance Bill which, together with its associated Implementation Regulations, is expected to become law before the end of this year, echoed Chombo.
He added that management structures at state entities should ready themselves for full compliance with the reporting requirements stipulated by the new bill coming into force soon.
Chombo hinted that the days of no boards, incomplete boards, one-man boards, non-existent board committees and indefinite acting CEO’s are gone adding that remuneration of parastatal bosses will be be based on performance measured and assessed, both of the individual and of the entity.