The move last week by NetOne CE to fire 9 executives is a telling case of a company in dire financial straits and desperate for redemption. NetOne has struggled to report a profit in as many years and over the past 6 years the company has reported a loss position in each of the successive years. In 2017 the loss position was even worse off compared to the prior year as the telco entity continued to lose ground to competition. It is very regrettable that the man who was brought in to steady the ship and redirect it on the right course is being victimized having been suspended with effect from today.

The substantive appointment of versatile and experienced Muchenje who had accumulated experience with top industry players in the region, brought fresh hopes that the organization would further restructure and refocus so as to find its way back to profitability. Muchenje succeeded Kangai who together with a number of executives were fired on charges of gross corporate misconduct involving dodging of tender process, conflict of interest and investment in underperforming businesses. His successor in Acting capacity, Mutandiro was also reportedly mired in scandals which stands to prejudice the parastatals and is also alleged to be part of a syndicate involving the ICT minister and some main board members working together to strip the company. It is alleged that Mutandiro together with other fired directors are Supa’s men and firing them sets the CE on a clear collision path with the powers that be.

As latest as July 2018, NetOne was sued by an Israeli company for $12 million after the unprocedural termination of a contract with the later. Allegations of misleading the tender board SPB who preferred a Chinese contractor, were levelled against Mutandiro, who was the then acting CE when the decision was made. Outside of the mudslinging, it is quite clear that the government has had undue influence in the dealings of Net One from time immemorial. The unprocedural awarding of tenders to Bopela, a G40 and known Grace Mugabe ally, in the Kangai era, and the swap tender between the Israelis and Chinese under Mutandiro all point to political manipulation, influence and collaboration.

As government seeks to restructure parastatals with a view to improve efficiencies and restore profitability, it is imperative to allow the executive management to play its part and help dismantle beaucracies that surround their operations. A 2016 report by the Office of the President shows that at least 38 of the 92 parastatals in Zimbabwe reported a loss in 2016. Cumulatively a loss of $270 million was incurred across the parastatals in that respective year. This equates to circa 7% of the national budget. The figure is huge given the size of our economy and further meddling and interference exacerbate the status quo. Sufice to say ZIm has been losing that much since 2009, it follows that the sum total could have been enough to clear govt debt to multilateral partners presently sitting at $3.1 billion.

It is not possible to attract investors or new money into companies without proper governance structures and the present state of Zim parastatals is appaling looking at how corporate governance is overlooked mainly at the behest of senior government officials. it is not enough to have a compelling business model. There is need to put in the right structures to manage and provide oversight. The case at NetOne is a clear test to the Mnangagwa administration to stand by its word on reformation and restructuring. Although the telco terrain is tough, highly skewed in favour Econet, a public company which has sharpened its art over the past 20 years, Muchenje has reenergized NetOne, particulary focusing on the mobile wallet OneMoney. The numbers have been improving over the close to 1 year period, he has led the company.

It is time to open up the business space, speed up on privatization of some entities, restructure parastatals with a view of allowing for competent personel and zero meddling in day to day running of the company. There is need to reduce the budget deficit to allow for economic growth, and funding towards most of these underperforming entities grossly weighs on the fiscus. These underperformers can either be rationalized or restructured in the case of those with a clear value proposition such as NetOne. This is a low hanging fruit for the “new” administration.