THE exposure by Wikileaks’ siamese twin, the Panama Papers, might have been overshadowed by the inimical cash shortages and the chaos rocking the country’s parastatals, but nevertheless the release of these documents presents Zimbabwe with yet another pointer towards causes of the economic mess we are currently in.
While Wikileaks provided us with scintillating revelations of the behind-the-scenes activities of our politicians from both the ruling ZANU PF party and the perpetually beleaguered MDC-T, the Panama Papers’ exposures will surely make all progressive Zimbabweans understandably agitated as they unravel the malevolent corruption and economic sabotage the country has been subjected to.
The papers give us a tale of how businesspeople, certain individuals and top companies siphoned hard cash out of the country resulting in the shortages being experienced.
On the evidence of the papers, there is no doubt some state-owned entities are struggling to perform due to the nefarious activities of officials entrusted to make these enterprises viable.
Crucially, the insightful Panama Papers’ disclosures have armed us with information on how the pervasive cash shortages came to be.
The Panama Papers are 11,5 million leaked documents that detail financial and attorney–client information for more than 214 488 offshore entities.
The leaked documents were created by Panamanian law firm and corporate service provider Mossack Fonseca, some dating back to the 1970s.
The latest release, with information on Zimbabwe, includes the names of over 200 prominent local businessmen and company executives who have been making use of the Panama law firm.
According to legal experts, it is not necessarily an offence or illegal to have an offshore company or bank account, but some of them have in the past been used for tax evasion and externalisation of funds.
According to the Reserve Bank of Zimbabwe (RBZ), US$1,8 billion was spirited out of Zimbabwe in 2015 alone through illicit transactions as well as inflated management and technical consultancy fees to foreign entities.
Although it is said there is nothing illegal about one being linked to offshore companies or bank accounts, the files leaked in the Panama Papers raise fundamental questions about ethical conduct in tax havens.
Yet parastatals continue to present a terrible drawback to the country’s prospects for the much needed economic development.
In a lecture to senior military officers at the National Defence College, a fortnight ago, Vice-President Emmerson Mnangagwa revealed that Government had started processes to turnaround State-owned enterprises to reduce fiscal burden and ensure operational viability.
Parastatals contribute 42 percent to the Gross Domestic Product (GDP) when operating at full capacity, but ours have been a huge disappointment due to incompetence and mismanagement by officials.
Instead they have become a burden to the state which constantly bails them out.
There are 76 parastatals in the country.
Under the Parastatal Reform Programme, 11 key enterprises have been earmarked for transformation.
The 11 enterprises are, the Industrial Development Corporation of Zimbabwe (IDCZ), the Zimbabwe National Water Authority (ZINWA), Civil Aviation Authority of Zimbabwe (CAAZ), the Agricultural and Rural Development Authority (ARDA), Air Zimbabwe, the Cold Storage Commission (CSC), Grain Marketing Board (GMB), the National Railways of Zimbabwe (NRZ), TelOne, Zimbabwe Iron and Steel Company (ZISCO) and the Zimbabwe Power Company (ZPC).
“As a first step, Government has identified the parastatals (earmarked for reform) and begun to take audits of the first few,” said VP Mnangagwa.
“To date, two audits have been completed on GMB and CSC and three turnaround strategies submitted for approval by Cabinet for TelOne, ZINWA and IDCZ.
“Decisions have also been made to seek strategic and technical partners in Air Zimbabwe and the NRZ. There are plans to unbundle CAAZ into a separate regulatory and commercial entity while ARDA is in the process of establishing joint venture partnerships for several of its farming estates.”
Privatisation remains a priority for these struggling entities but there is still much to be done towards achieving that objective which includes, among other measures, improving oversight and governance of the parastatals in order to strengthen accountability.
Key to this plan is selecting boards on merit.
There have been allegations of nepotism in the selection of boards and this has been cited as the reason the entities have been perennial under-performers as they are manned by incompetent, corrupt and gluttonous officials.
Among issues Government should consider in the reform process is addressing issues to do with performance of those public entities, their corporate governance, debts and restructuring programmes.
In his State of the Nation Address (SONA) in Parliament in August last year, President Robert Mugabe said Government had embarked on a programme to reform parastatals and State enterprises.
“Another key priority for Government as we strive to return the economy to sustained growth is the reform of parastatals and State enterprises,” said President Mugabe.
“In each case, specialised audits are to be undertaken and various reform and turnaround options identified, underlining the importance we accord agriculture.
In his SONA, President Mugabe revealed that Government had turned the spotlight on corporate governance throughout the public sector, including across all parastatals, State enterprises and local authorities.
“It is very clear that, over many years and due to a variety of reasons, the level of compliance with good corporate governance principles at many, if not most of our parastatals/State enterprises, has fallen to levels well below what might be regarded as even ‘minimally acceptable’,” said President Mugabe.
“The extravagance of the remuneration packages and associated benefits, which boards and management have blithely awarded themselves, borders on the obscene reflecting avarice and greed, instead of the commitment to serve which we expect, indeed demand, of those appointed to such strategic positions.”
The rebuilding of Zimbabwe requires competent and committed people who have the nation at heart, not criminals out to strip the country.
Let those with ears listen.