For the longest of times, we’ve heard the government say they are going to do this and that and after a while, nothing is ever said or done. When it comes to privatisation of parastatals the government seems to be determined to do what they set out to do and now they are reported to have set a deadline for the privatisation.
The Herald is reporting that underperforming parastatals have been given 6-9 months to conclude privatisation deals. The list of underperforming parastatals includes NetOne, Telecel, TelOne and POSB.
Finance Minister Mthuli Ncube also revealed that the government has spent $500 million over the last two years supporting struggling parastatals. The bleak picture continues as Herald reports that last year, 38 of 93 parastatals incurred a combined loss of $270 million.
The minister alluded to the fact that some companies will actually be going under. Three enterprises (which were not disclosed) have been targeted for dissolution while seven other entities will be “departmentalised into line ministries.”
We know interest in NetOne is already said to be high and because this is the case I expect there might not be too many problems in offloading that baby. TelOne also seems to be turning their ship around and I expect there might be leeway for something to be done there. Telecel, on the other hand, is not only dealing with legacy debts but also some ownership wrangles and they also have the lowest subscriber base in the mobile market so it will be interesting to see what kind of deals can be made to acquire a stake there.
Good news?
I can’t help but feel privatisation will definitely kill many birds with one stone… Firstly and maybe most importantly, the government has been carrying these lossmaking companies on their back for way too long. Getting these companies off their hands will definitely reduce their burden and the resources they have been using to keep these companies afloat can safely be allocated to other projects.
A revitalised telecoms market
Secondly, the telecommunications industry in Zimbabwe could be revised entirely if NetOne, Telecel and TelOne all shift their ownership structures. Think of Telecel who have been stuck in limbo for years due to boardroom squabbles which always seem to find a way to avoid a conclusion. The company continues making losses ( that’s the belief as government entities usually share results only when they make profits).
The revival of these three players could entirely shift the telecommunications market and it will be interesting to see what new blood can bring to this space. Obviously, the blame isn’t entirely on the telecoms companies as government interference has made it difficult for the leaders of these enterprises to actually carry out their mandate.
What government needs to do has been public knowledge for a while and because of the adversities we’ve faced in this country, zimbos have slowly but surely become quasi-economists. The government isn’t saying anything out of the ordinary when they propose these reforms. I think the partial-privatisation of state-owned entities could really be a great thing and I’ve talked about that at length before. Now let us see if they will actually follow through and implement all these measures that they are promising…
