Parastatals make $270 million loss, weak corporate governance practices cited

In his remarks during a stakeholders’ workshop held in Harare on guidelines/manuals focusing on enhancing board effectiveness and performance management derived from the Public Entities Corporate Governance Bill, Chief Secretary to the President and Cabinet Misheck Sibanda revealed that 30 out of 93 State-owned enterprises (SOEs) audited last year incurred a combined $270 million loss. This was blamed on weak corporate governance practices and ineffective control mechanisms.

Said Sibanda:

Audited financial statistics for 2016, for 93 SEPs (State enterprises), revealed an overall loss of $270 million by the 38 surveyed commercial entities. The worrying fact is that for those 93 entities, 70 percent of them were ‘technically insolvent,’ or ‘illiquid’, presenting an actual or potential drain upon an already overburdened fiscus. Without doubt, the most serious common weakness identified during the survey revolved around the structure, composition and competence of boards, and the manner in which the boards themselves operate.

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