Debts among parastatals, estimated at US$1.2 billion, hindered their abilities to fulfill their mandates to provide and services to the public.
Permanent Secretary for Corporate Governance in the Office of the President and Cabinet, Allen Choruma said this while making a presentation on Corporate Governance in the Public Sector during a Public Procurement and Corporate Governance Conference organised by the Procurement Regulatory Authority of Zimbabwe (PRAZ).
He said while some public entities have met viability expectations, some were struggling.
“There are both successes and challenges in public entities. High debt exposure among parastatals, where some are not servicing their obligations to others, is a pressing issue,” Choruma said.
“For example, entities like PRAZ may question why they should meet tax obligations to Zinara since it’s a government entity. Vanenge vachiti ndezve hurumende so why should we pay,” he said, giving an example of the attitude of parastatal towards each other.
Choruma spoke of a penchant for travel for rent seeking purposes where people in the public entities simply want to travel at any cost.
He noted that public entity officials often pursue “rent-seeking” opportunities, with some board members competing to join trips that are strictly operational, ultimately resulting in unnecessary expenses.
“Penchant for travel is a cause for concern where people in public entities simply want to travel at any cost. People want to travel for rent seeking activities where one person is supposed to travel for the trip, four people will go,” he said.
“Where management is supposed to go for a trip, board members want to go as well. There is competition that we can’t go without a board chairperson. You will hear some saying we can’t go without board members yet it’s purely an operational issue,” said Choruma.
Other concerns he raised include inactive boards and blurred lines between board and management responsibilities.
Choruma also highlighted the under-representation of young professionals on public boards, where individuals under 35 have been excluded.
“Our boards are largely composed of individuals between 35 and 65 years old. Embracing diversity means bringing younger voices into the fold,” he said.
Although there were some challenges, Choruma acknowledged improvements in compliance with the Public Entities Corporate Governance Act, which increased from 60 percent in 2020 to 73 percent in 2022.
“There is a strong desire to uphold good corporate governance standards. Last year, 68 percent of state enterprises scored above 70 percent in compliance, while only eight percent scored below 50 percent,” he noted.
Gender representation on boards is also improving, rising from 33 percent in 2020 to 45 percent in 2023.
However, Choruma admitted that much progress is needed, particularly in achieving gender parity among Chief Executive Officer and board chair roles, which remain predominantly male.
He commended advances in corporate governance within public entities, citing the example of corporate secretaries, where female representation has exceeded 50 percent.
“The public sector is becoming a more balanced space, with 58 percent of corporate secretaries now being women,” he added.
He said there has been increased accountability measures by public entities.
“Last year, 61 percent of public entities produced timely annual reports, up from 35 percent. All entities submitted strategic plans and completed board charters and codes of ethics, while 76 percent submitted asset declaration forms, signalling movement toward greater transparency and anti-corruption efforts,” he said.
Choruma expressed optimism that public sector governance will see continued improvements as reforms progress.
“With regulatory bodies showing compliance levels above 60 percent, our
regulatory environment reflects high standards,” he said.
New Ziana