Telone Privatisation To “Bring New Growth Opportunities”. Gvt Still Just Talking But Not Going Ahead With Privatization

The privatisation of state-owned enterprises is one of President Mnangagwa’s strategies to return these companies to the fold of efficiency and profitability. Back in April last year, the government published a list of its enterprises that were going to be both, merged and privatised.

Among the companies that were going to be privatised were the likes of Telone, Netone to name just a few. The seemingly obvious benefits of privatising these entities was yesterday mentioned by The Parliamentary Portfolio Committee on Information Communication Technology.  

…….In light of this, the plan by the government for partial privatisation of TelOne is expected to bring new opportunities for growth, with anticipation for a positive outlook in terms of revenue, profit as well as debt management, and all these buoyed by broadband and over the top (OTT) services………

Despite declarations and promises to privatise state enterprises like Telone, nothing really has happened in the physical realm. It’s still just talk, talk and talk, 3 months since President Mnangagwa got into power.

It’s well known that the privatisation of government enterprises increases their efficiency and ultimately improves their fortunes, largely because competition incentivizes innovation and improvement. That’s why the Committee and (I think) everybody is warming up to the idea of privatisation because right now these enterprises are just baggage. The baggage is coming in the form of bills and loans the government is having to pay and payback.

In the case of Telone, the telecoms company is facing the uncertainty of whether it will continue to provide its customers with services indefinitely as its creditors recently served them with ultimatums threating it with service disruption. As a result, Telone has since started begging for money from the government to avoid being cut off by the foreign creditors.

You see why the government is motivated to privatise Telone and other enterprises? It can’t be in the habit of bailing out state-owned enterprises like Telone when they have thrown themselves in hot soup. So besides the improved efficiency that comes with privatising Telone, the investors may likely take over Telone’s intimidating debt and let the government off the hook of footing bills.