Zimbabwe to sell shares in 35 state-owned firms as part of steps to revive the economy

Zimbabwe is planning to sell shares in 35 state-owned firms as part of its steps to revive the economy under the new leadership of President Emmerson Mnangagwa. Zimbabwe’s finance minister Patrick Chinamasa said the state-owned firms will include both the mining and telecoms parastatals.

Chinamasa said the parastatal reform was “designed to enhance performance, improve services delivery and to bring more order, discipline and rationality to the sector as a whole. Government ministries would present privatisation plans to the cabinet for each entity within 100 days.”

He told reporters that this would be done through engaging strategic partners and floating shares on the local stock exchange. Reuters reported that the targeted firms include mobile carriers NetOne and Telecel, fixed-line operator TelOne and savings bank POSB, all owned by the state.

The shares in 17 government-run mines would also be sold because the mine, which mainly produces gold, has struggled over the years due to lack of capital and mismanagement.

According to Chinamasa, some state regulators will become government departments while others will merge to save costs and minimise bureaucracy. The Special Economic Zones Authority will merge with three others, including the Zimbabwe Investment Authority to provide a one-stop shop for investors.

“It is the right thing to do but the government should go a step further and say ‘we are moving out altogether’ out of these companies,” John Robertson, a Harare-based economic analyst, told Reuters. “When the government is a shareholder they are seen by investors as a source of difficulty rather than assistance.”

Since President Emmerson Mnangagwa came to power in November last year he has made reviving the Zimbabwean economy his top priority in order to bring back the economy that was destroyed by Robert Mugabe. During Robert Mugabe’s regime, Zimbabweans endured hyperinflation, crashed currency, chronic unemployment, corruption, crumbling infrastructure, and mismanagement of funds.

Even if the government introduces the much-needed reforms, it could take at least 10 years to turn the economy in the right direction with all these problems facing the country.