It is critical that public entities, particularly state-owned enterprises and parastatals, perform in a sustainable manner to ensure the attainment of an upper middle-income society by 2030, the head of the Corporate Governance Unit in the Office of the President said on Thursday.
Delivering the keynote speech at the annual conference in Victoria Falls of the Chartered Governance and Accountancy Institute in Zimbabwe, the permanent secretary heading the unit, Mr Allen Choruma, said public entities are enablers and stimulants for economic development, growth and stability.
They provide essential services in areas such as health, housing, education, agriculture, tourism, mining, transport, aviation, tourism, and other critical sectors, he pointed out.
“The good governance of our public entities is therefore a matter of public policy interest, national economic stability and growth.
“The Chartered Governance and Accountancy Institute in Zimbabwe has been working with us to enhance the corporate governance in public entities,” he said.
The conference is running under the theme ‘Attaining Vision 2030: Chartered Governance and Accountancy Professionals – Catalysts for Economic Transformation’.
In his welcoming remarks, the institute’s president, Mr Jonathan Dube, told members of the institute that, as experts in governance and accountancy, they had an important role to play in helping achieve the government’s vision of achieving an upper middle-income economy by 2030.
Mr Choruma said that at their peak in the 1990s public entities contributed as much as 40 percent of the country’s Gross Domestic Product. Last year they contributed less than 10 percent.
“A decline in GDP contribution of public entities – in particular state-owned enterprises and parastatals – has impacted negatively on economic growth and the provision of efficient service delivery to the citizenry, the ordinary people of Zimbabwe, thus undermining the upliftment of their living standards and quality of life,”| he said.
He said Zimbabwe’s developmental model was one where the state leads in planning, policy formulation, regulation and control and creates enabling infrastructure and an environment to stimulate development,
“The private sector leads in investments, creation of the means of production and generation of wealth, employment and opportunities for our people,” he said
The ultimate shareholder in public entities was the people of Zimbabwe. Pubic entity boards and senior staff were therefore accountable to the people.
“The people expect public entities to deliver efficient, reliable, accessible and affordable service to the citizens. They expect public entities to be accountable and transparent to the people over use of public resources and shun corruption and abuse of public resources at all costs.
“Sustaining economic growth through accountable resource management is the deal, the real deal, towards the attainment of Vision 2030,” Mr Choruma said.
He said Zimbabwe stood out among its regional and continental peers by having a well-defined legal framework that institutionalises and prescribes corporate governance standards in public entities.
“Our challenge remains in the area of enforcing compliance, applying sanctions for non-compliance as well as providing incentives for compliance,” he said.
Nevertheless the level of compliance had improved from 55 percent in 2020 to 75 percent last year. He outlined a number of areas where improvement was still needed, including ensuring that compliance levels positively corelate with entity performance and service delivery.
Other areas his unit had identified for improvement included ensuring there were more people below the age of 35 on boards and ensuring line ministers extend or renew the term of office of board members within the stipulated time limits.
“The Corporate Governance Unit is pleased that the interventions the Office of the President and Cabinet is making in enhancing good corporate governance in public entities are starting to bear fruit, with impact noticeable in areas such as accountable resource management, sustainability of entities and less reliance on Treasury support, reduction in fiscal risks, reduction in incidences of corruption, enhanced performance of entities and improvement in service delivery to the people of Zimbabwe.
Delegates enthusiastically applauded at the end of Mr Choruma’s speech, with one participant saying what an eyeopener it had been for her to learn how much government was doing that she, like most people, were unaware of.
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