Zim seeks international partnerships

ZIMBABWE is seeking partnerships with multinational companies to boost its ailing parastatals and grow the economy, Industry minister Mike Bimha has said.

Bimha told delegates attending the Willowvale Motor Industries BAIC Grandtiger production launch this week that the country was open for business.

“The event we are witnessing is a result of a joint venture partnership between the Beijing Automotive Industry Cooperation (BAIC), Willowvale Motor Industries and Astol Motors that formed the company BEIQI Zimbabwe,” he said.

“It is these kinds of partnerships that obtain across jurisdictions that Zimbabwe as a country is looking for.
“This enables the country not only to substitute imports but generate the much-needed foreign currency through exports and create employment,” Bimha added.

The Zanu PF Cabinet minister noted that success of this project depended on cooperation from other stakeholders such as the financial services sector.

“It is government’s hope that banks will grab this opportunity to support the initiative by establishing retail financing structures at favourable terms so as to stimulate demand and ensure growth of the sector,” Bimha said.
Economic experts, however, said there was need for parastatals reform before foreign investors can inject their hard-earned cash.

This was after Zimbabwe recently received $4 million from  the African Development Bank (AfDB) to reform its ailing parastatals.

The regional bank’s director general, Tonia Kandiero, said no profound change can take place in member countries — including Zimbabwe — in the absence of effective institutions with good corporate structure, accountability, culture and mechanisms to track performance.

“State-owned enterprises are key to delivering services and enabling citizens and private capital to realise their potentials,” she said.

Kandiero noted that historically State-owned enterprises were a significant source of employment as well as productive investment with up to 40 percent contribution to the gross domestic product of the country. However, in recent years their performance has dwindled and posed a significant strain on the national budget.

Zimbabwe’s over 63 parastatals, including the Cold Storage Company, Industrial Development Corporation,  Zimbabwe Mining Development Corporation, Grain Marketing Board and many others, used to contribute significantly to the country’s economic growth in the 1990s.

However, they are now weighing down Treasury by constantly drawing down money from government.
Recent reports by Auditor-General Mildred Chiri indicate that state-owned enterprises and government departments operate in the red, continuously bleeding the fiscus and in most instances failing to adequately provide the service for which they were set up.

The parastatals are grappling with high overheads, inter-parastatal debts, mal-administration, under-capitalisation, corruption and lack of good corporate governance which have negatively impacted on their operations.
Over the past few years government came up with various strategies to restructure and dispose shareholding in some State-owned enterprises, but has failed to implement these measures.

Once, several entities were earmarked for restructuring or privatisation and these included the National Railways of Zimbabwe (NRZ), Zesa Holdings, Air Zimbabwe, Agriculture Development Bank of Zimbabwe, the Grain Marketing Board, POSB, Zimbabwe Grain Bag, NetOne and TelOne.

NRZ currently requires in excess of $2 billion to turn around its fortunes by replacing antiquated infrastructure, including railway tracks, telecommunication signals and wagons, which have outlived their lifespan.

Its resuscitation would increase the movement of goods by rail within Zimbabwe and in the region, earning significant revenue in the process and helping in efforts to grow the economy.

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