Harare – Finance Minister Mthuli Ncube on Tuesday said the Government expects to raise $350 million from selling shares in five-state owned telecommunication companies and a bank, as part of economic reforms being pursued by the country.
The Government’s Transitional Stabilisation Programme, outlines the State Enterprise Reform initiative as one of the most important areas to ensure sustainable economic growth and improved service delivery.
State enterprises, in their foundation, were supposed to play a major role in the provision of infrastructure and other critical services such as water, electricity, telecommunications, transportation, health, education, among others.
However, recently, they simply are not up to the task. It has been noted that most of them are loss making (99 per cent) and they continue to hold onto idle and unproductive labour, accumulating salary arrears and continuously requiring bailouts from Government to finance their operations and debt servicing.
In his State Enterprise Reform Mthuli said creative destruction is required to reform and restructure the economy. He added that the reform and restructuring process will include a host of thought-out and carefully examined interventions. These reforms will range from liquidation, full privatisation, transformation to regulate, merging and demerging, as well as departmentalisation into existing ministries, depending on how strategic the parastatals are and their respective performances.
In a statement on Tuesday the Treasury boss said the government would dispose of shares in its two mobile phone operators NetOne and Telecel Zimbabwe, the country's sole fixed line telephony company TelOne, postal services Zimpost and state-owned savings bank POSB.
"Work is already under way to identify transaction advisers. (The) government projects to realise over $350 million from this initial process," Ncube said in a statement.
He later told a post-cabinet briefing that NetOne and TelOne would be sold as one entity by September and the government would retain at least 40 percent holding.
The Zimbabwean unit of Price Waterhouse Coopers has been chosen as transaction advisers for TelOne and the government also wants the company to advise on NetOne, Ncube said.
South African telecoms giants MTN, and Telkom had previously expressed interest in NetOne, and Mthuli said there are among the companies that would be approached to bid for shares.
"If these entities are still interested, and we will approach them and let them know by the way, and then they have a much bigger asset to compete for. But there will be other suitors that we will invite," Ncube told reporters.
TelOne, with over half a million subscribers, is saddled with debts of $380 million and incurred a loss of $11.8 million last year, while NetOne, which has 5 million subscribers, swung to a $10 million profit in 2018.
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.
The Harare government has targeted selling some or all shares in 43 of its companies, most of which are loss-making and have relied on state bailouts over the years.
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