office of the vice president

Address By the Vice President Honourable J.T. R. Mujuru (M.P.) at a meeting to discuss corporate governance issues in parastatals Munhumutapa building 2nd floor board room.

Honourable Ministers and Deputy Ministers here present
Senior Government Officials here present
Chairpersons and Chief Executives of Pa rastatals here present
Ladies and gentlemen
Comrades and friends

I welcome you all to this meeting which I have convened to discuss and share with you what is expected of Parastatals and State Enterprises in the year 2007 and beyond. This meeting is a fore-runner to meetings we will have in 2007 under the Cabinet Committee on Parastatals, which I have the privilege of chairing.

State Enterprises were all established to fulfill certain strategic goals and objectives. We have had mixed fortunes in the performance of these entities. The reasons for poor performance for some of you are known and specific to each Parastatal or State Enterprise. Some are even historical. It would therefore, be unfair for me to generalise and condemn Boards or Management for poor performance. It must however, also be acknowledged that for now you are the people entrusted to run those entities, so we can only look at you to account for your parastatal's performance.

There are however, some basic expectations that I have as the Vice President responsible for parastatals and also as the Chairperson of the Cabinet Committee on parastatals, which I expect you to fulfill from 2007 and beyond. It is precisely for this reason that we are here. Honourable Ministers, ladies and gentlemen I will briefly touch on each of my expectations.

Performance Targets
Each Parastatal/State Enterprise is unique and performance targets have to be unique to that particular entity. I expect each Minister to cause the Board and Management to prepare and for the Minister to come and present to my Office reasonable and realistic annual performance targets.

These include operational, production, recapitalisation and financial targets. (Cabinet will be informed).
In order to ensure quality control and standardisation in the preparation of these performance targets, Ministries will prepare, and discuss the same with a Technical Committee comprising of officials from my Office, the Department of State Enterprises, Anti-Monopolies and Anti-Corruption, the Ministry of Finance, the Department of Policy Implementation, the State Enterprises Restructuring Authority and the Reserve Bank of Zimbabwe. In this respect my Office has opened a file for each parastatal and where no submission is made our records as the Presidium will show.

Performance Contracts for Chief Executives
A lot has been said about the need for performance contracts for Chief Executives in Parastatals and State Enterprises. Please be advised that with effect from January 2007, it is now a requirement for all Chief Executives of parastatals to be on performance related contracts. I am pleased that most, if not all Honourable Ministers here have been talking about this issue. I therefore, take this as something that is already in place. I am therefore expecting you, Honourable Ministers, to submit signed copies of the performance related contracts in respect of all your Parastatals and State Enterprises to my Office by the end of January 2007. If anybody has a problem with this date please come and we can discuss why it cannot be met.

External Audits for Parastatals
It is a legal requirement for Parastatals and State Enterprises to have their accounts externally audited within six months of the close of the year. I am concerned that some amongst you have gone for years without external audits. Honourable Ministers, its your responsibility to ensure compliance as these have to be presented to Parliament. When we regroup at the end of January 2007,1 demand a chart from the Minister of State Enterprises, Anti-Monopolies and Anti-Corruption and the Minister of Policy Implementation indicating when last the external audit was done for each and every one of our parastatals, and together we will regularly update Cabinet.

Corporate Governance Issues
I note, with great concern, that a number of Parastatals and State Enterprises either have no Boards or there are vacancies on the existing Boards. Alternatively the same people are appointed to serve in too many Boards until they become ineffective. Similarly there are parastatals that have gone for years without Chief Executives. This is very regrettable for a country that prides itself of
having some of the best human resources in the world. We need to be fair to our institutions and to ourselves as a country and in this respect I demand that vacancies for senior management posts and Boards be filled within the next three months. We will revisit this subject at the end of March 2007 with the individual Ministers.

Implementation of Turn Around Strategies
Some parastatals were instructed to prepare and present turn around strategies for approval by Government. Others are in the process of implementing these. There will be regular reviews of progress in implementing turn around strategies next year, and if any parastatal is experiencing challenges, let them be discussed and resolved now and not at the time of reviews.
Similarly, I am aware that some parastatals got funding under Parastatals and Local Authorities Reorientation Programme, PLARP spearheaded by the Reserve Bank of Zimbabwe. From those parastatals that benefited from that funding, we now expect results. You cannot be turning around forever, otherwise you get dizzy and collapse! I also challenge Ministers here present to assist each other in identifying any additional parastatals that are candidates for turn around strategies.

Monitoring Mechanisms
Most issues I have talked about above have been discussed in several meetings before. What has lacked is implementation and effective monitoring. We now have in place enough structures to ensure total compliance or to alert Government on areas of non-compliance. I hope these institutions will not be found wanting.

I have also been advised that there are a number of institutions that have virtually been demanding the same information from Parastatals and State Enterprises in the context of monitoring of parastatals. Henceforth I expect these to work as a team and share information between them. I am confident that if the parent Ministries kept some basic, relevant information on each of their parastatals, the issue of various institutions demanding the same from parastatals would not arise. I therefore, expect each Ministry to maintain an up to date database of key indicators and frequently asked for information such as financial, operational, recapitalisation targets in respects of each of your parastatals. This will also enable you as Ministries to monitor the performance of each of your parastatals with a reasonable sense of accuracy.

Government entrusted each one of you with a heavy responsibility, which you as individuals must be proud of. The mere fact of occupying your respective offices should spur you on for the good of your country. I hope you will give this discussion some deep thought and make up your mind whether you have the commitment required of you in your respective office.

On my part I commit myself to monitoring what I have outlined above. I hope my intentions and vision are shared.
Ladies and gentlemen, we will reconvene to review progress by the end of January 2007.

I thank you all for coming and take this opportunity to wish you all a peaceful and accident-free festive season.

I THANK YOU.