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Privatisation of parastatals takes shape

Finance minister Mthuli Ncube says government will appoint transaction advisors to spearhead the privatisation of five key State-owned enterprises (SOEs).

Mthuli Ncube
Mthuli Ncube

The targeted five enterprises are Zimpost, NetOne, TelOne, Telecel and the Peoples’ Own Savings Bank (POSB).

“Government has targeted five public enterprises for immediate reforms and work is already underway to identify transaction advisors,” he said.

According, to the 2019 National Budget, the five key enterprises are to be privatised under joint venture agreements and were given between 12 to 18 months to conclude the privatisation deals.

The entities used to contribute 40 percent to the economy, but poor management, corruption and weak corporate governance systems ran them down.

As a result, a total of 38 out of 93 SOE’s audited in 2016 incurred a combine loss of $270 million.
Ncube said government will realise at least $350 million from the initial process.

Meanwhile, according to the latest Treasury report, cost containment and revenue enhancement measures pronounced in the 2019 National Budget statement presented in November last year, are now delivering positive results after a surplus of $113 million was recorded in January.

The document shows that revenue expansion and expenditure management strategies which form part of the core reforms entailed in the economic reform programme Transitional Stabilisation Programme (TSP) are bearing fruit as proven by a sharp decline in the monthly budget deficits from $651,2 million in August 2018 to $39,8 million in September and $242,1 million in November and preliminary indications point to a surplus of $732,7 million in December 2018.

“With regards to January 2019 preliminary figures, revenue of $508,5 million was realised against disbursements/commitments of $395,5 million, indicating a surplus of about $113mln,” read part of the document, which details government’s progress on policy reforms.

Ncube noted that government introduced a two percent tax per dollar value transacted in October last year, replacing a previous tax of 5 cents per transaction.

As a result $52,5 million was raised in November and $103,8 million in December 2018 giving a total of $166,2 million for 2018.

“By January 2019, the Electronic Transactions Tax raised $98,5 million and it is anticipated that $600 million will be raised during 2019,” he said.

According to the policy progress document, treasury said government has struck out more than 3 000 ghost employees who have been forming part of its bloated workforce.

However, economic growth is now forecast at four percent, primarily driven by agriculture, mining and services.

Strong economic activity is, however, confined to the first nine months of the year, with challenges related to prices increases, fuel and foreign currency shortages stalling the economy to reach higher levels of growth,” he said. DailyNews