Home » Entertainment » PARASTATALS IN ZIMBABWE INCUR LOSSES TOTALLING 270 MLN USD IN 2016

HARARE, Zimbabwe's State-owned enterprises (SOEs) and parastatals recorded a total loss of 270 million US dollars loss in 2016, putting more strain on the overburdened government purse, says the Chief Secretary to the President and Cabinet, Dr Misheck Sibanda.

Addressing a stakeholders workshop on the Public Entities Corporate Bill here Wednesday, Dr Sibanda attributed the losses to ineffective internal control systems which resulted in managements paying themselves hefty salaries at the expense of service delivery.

Audited financial statistics, for 2016, for 93 State Enterprises and Parastatals (SEP's) revealed an overall loss of 270 million USD by the 38 surveyed commercial entities," he said. The worrying fact is that of the 93 entities, 70 per cent of them were either 'technically insolvent' or illiquid, effectively presenting an actual or potential drain upon an already overburdened

fiscus."

Dr Sibanda said corporate governance weaknesses and ineffective internal control systems significantly contributed towards the perpetual under-performance of SOEs. Some entities have operated for extended periods without a full board. In one case, admittedly extreme, a strategic entity was run by a one-person board for more than two years, he added.

He said the Public Entities Bill, currently before Parliament, is designed to address those governance weaknesses.

Finance and Economic Development Minister Dr Ignatius Chombo said the government was determined to address the corporate governance weaknesses prevalent across state entities.

The days of no boards, incomplete boards, one-man boards, non-existent board committees, indefinitely acting CEOs (chief executive officers), Finance Directors or Heads of Internal Audit, are well and truly gone, he said.

Dr Chombo said bonuses, if they were to be paid at all, should only be awarded after annual audited financial statements confirmed a satisfactory overall performance.

A recent forensic audit of one entity revealed that Management had paid itself two bonuses in 2012 and three bonuses in 2013. Nothing can justify this squandering of public funds. My Ministry will be acting to ensure recovery of such unjustified payments from all those who benefited therefrom, he said.

President Robert Mugabe recently threatened to shut down non-performing SOEs, saying they were bleeding the fiscus with habitual bail-outs. The sector's contribution to the gross domestic product (GDP) has slumped to around 2.0 per cent.

Source: NAM NEWS NETWORK

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