New Zimbabwe.com

State sector fiducial crisis: Some suggestions for the way forward

THERE have been many comments made over what I see as a fiducial crisis in Zimbabwe’s State-owned sector, most of them focus on nailing the guilty and bringing them before the law. While that may sooth the anger of Zimbabweans in the short term, in my opinion the root of the problem is not in the personalities who have made mistakes or who have been corrupt but in the whole SYSTEM itself, particularly the way Boards of Directors are appointed to our public enterprises.
Government achieves all its responsibilities and economic plans through these State-owned enterprises/parastatals. When Zanu PF, the MDC and other political parties draw up their election manifestos, the promises they are making there will be delivered through no other vehicle except those public enterprises or institutions that we see being run with no direct accountability to Parliament when in fact it is Parliament that citizens elect to deliver promised outcomes. Effectively the whole executive i.e. Parliament, the Cabinet and the State President as well as Zimbabwean citizens who put them in Parliament, are expecting their whole national economic program to be delivered in the different economic sectors by the GMB, ARDA, NRZ, ZMDC, ZBC, ZESA, and a host of other state-owned corporations/organisations.
So, it is crucially important for successful delivery of the national economic program (which the whole executive is responsible for, collectively) that the entire executive also collectively, should focus all their energies on seeing that these policy delivery vehicles are always managed efficiently, always running on course and meeting their set performance targets. Parliament has collective accountability for government performance and that requires its collective supervision of all policy delivery enterprises/institutions.
For, what else are these MPs elected to do in five years if throughout that period they leave everything to a few individuals appointed by a minister – who himself or herself is not necessarily appointed for his or her experience or ability to build and run large corporate organisations but typically for his or her political credentials, which often relate to loyalties to the top brass of the ruling clique at the time. Some of the ministers have never run an enterprise bigger than their own households but are thrust with a huge responsibility to run an entire economic sector and choose who they like to be on the boards of huge institutions that are so crucial to the outcomes that government desires citizens to get.Advertisement

If we are to ensure that the state’s policy delivery organisations run smoothly with a seamless continuity of effectiveness despite changes in the person who is in the minister’s office, these organisations must be run by competent, experienced Zimbabweans, and that starts from the Boards of directors and the top executives they in turn recruit and appoint to lead the organisations. 
Yet the appointment of the members of the boards and the top executives so crucial to delivery of economic policy is left to one person – a newly appointed minister in charge of the government departments under which the organisations fall. We all know that each time a new minister is appointed, one of the first things he or she does is to appoint HIS or HER own new Board of Directors for every parastatal under his or her ministry. It is acceptable practice that a minister appoints a new board as the members of the last board are the previous minister’s people. So it is the turn of the new minister to put his or her own people in to show that he or she now had power. This is happening within the term of the same parliament and boards can be changed willy-nily as many times as the minister is changed or whenever the minister wants to appoint new faces to the board.
That is the root of the problem. Being appointed minister does not make a person an expert in structuring and running large corporate entities. And, based on how ministers are chosen, it is very clear that a newly appointed minister should be the last person to have the power to dissolve boards and single-handedly appoint new ones. They often are new to the economic area covered by the ministry, as demonstrated last year by Minister Josiah Hungwe when he admitted publicly that he did not know what he was supposed to do as Psychomotor Activities minister.
And just recently, Information Minister Jonathan Moyo was quoted as having admitted that the uneasy power-sharing deal between Zanu PF and the MDCs that preceded last year’s election fuelled corruption because Boards of State firms became “arenas for political balancing” in which the two political parties divided up posts in key policy delivery organisations and appointed their supporters regardless of a candidate’s skills.
When the supervision of important state institutions responsible for delivery of key policy areas is being done with such lack of duty of care for the nation, and total disregard for the consequences on the economy, it is not surprising that we have all the problems we have experienced with the whole economy for the past 20 years or so. Our politicians in all the political parties are no more than just politicians: able to articulate the demands, needs and aspirations of their constituents but beyond that they do not know how the delivery of economic policy works. In the private sector, shareholders allow independent professional people to take care of the organisation, supervision and management of their businesses because they know where their entrepreneurship talents start and end. They tell the professionals what they want and then stand back and monitor results.
Likewise, our politicians represent us citizens as shareholders in the institutions/corporations created to deliver wealth and prosperity to us. If we are to get value for the investment poured into them, these organisations must be run by competent, experienced Zimbabweans, and that cannot happen when people are being appointed for “political balancing”. And let us not be mistaken to believe that political balancing ended with the GNU. Even within a ZanuPF only or an MDC only government there will be political balancing between various factions. So political balancing is a permanent feature of appointments to positions controlled by politicians.
In conclusion, here are my suggestions as to what our Parliament must do about the SYSTEM to get Zimbabweans value from their elected representatives in bringing the fiducial crisis we have across all state policy delivery corporations to an end.
[1]. Boards of state corporations/institutions should be appointed under parliamentary oversight via a special committee working hand in hand with the public and Service Commission rather than be left to newly appointed government ministers. In the private sectors. Boards are typically very effective and there is continuity of good governance and good performance because Board members are appointed professionally for their knowledge of some required key element of the organisations business portfolio. The Boards are also re-appointed every 12 months at Annual General Meetings (where their performance is put under the spotlight against targets) and not at the whim of some newly appointed senior officer. If we are serious about having effective and efficient Boards in State corporations/organisations, then we need to mirror best practices that make private enterprises more efficient than state enterprises. 
[2]. When appointing Boards, Parliament must ensure that the structure of the boards is representative of a wide stakeholdership such that a board is made up of nominees from government and organisations that are the key operators in each economic sector, such as CZI, ZNCC, Farmers organisations, Chamber of Mines, ZCTU, Indigenisation Organisations, etc. Boards should not be appointed and dismissed en masse at the whim of a minister but members should be rotated or reappointed annually under the oversight of a Parliamentary committee at AGMs rather than when a new minister is appointed.
[3]. Strict qualification criteria must be set for each board such that only people with a minimum of qualities and experience relevant to what is to be achieved by that enterprise are appointed and their terms of service set. 
[4]. Consideration must also be given to Board members being recruited from a Parliament-approved shortlist by submitting themselves to a live televised public interview process by a professional panel of interviewers at which they justify to the people of Zimbabwe why they think they are suitable for the role. This is done in other countries and so would not be a new, crazy thing to do.
[5.] Remuneration policies must be supervised by Parliament and must stipulate limits, with any changes being subject to approval by parliament and recorded
in the government gazette.
If we run our public sector that way the minister will influence the programs that the enterprises will do but not the efficiency and effectiveness with which they will be managed and executed. Under such a dispensation, the minister’s role is to provide policy guidance only but not to be involved in management of the institutions delivering policy, as this is not an area of expertise anyone commands simply by being elected to Parliament. In my proposal, that role reverts to Parliament and, if parastatals fail to execute their mandate effectively, their boards and executives are answerable to Parliament. The minister will only issue policy directives that have been decided by parliament.
The above would, in my opinion, bring professionalism and efficiency into public institutions, which, without doubt, are the delivery vehicles for all government policy by which we all stand or fall as a nation. If our government is serious about delivering its economic program, it must hastily professionalise rather than politicise the corporations, organisations and institutions responsible for delivering that program. I cannot see why any political party that wants to stay in power on a popular endorsement by citizens of its delivery performance would not want to run the public sector this way.
Finally, I think a precedent must also be set whereby board members of State organisations are held to account for permitting the looting of state enterprises through any form of deliberate executive impropriety, such as fraudulent compensation packages, salaries that are disproportionate to the organisation’s financial standing, and phoney suppliers of services. Public enquiries must be held where board members and their CEO are questioned and where possible the ill-gotten moneys recovered. And where criminality is
evident people must be taken to criminal courts.
It is my hope that every Parliamentarian will find it worth their while giving thought to my suggestions and hopefully putting them before their colleagues in the House as a step forward in repairing our shattered economy for the benefit of all of us. The problems in our state enterprises are not just about people stealing money from them: it’s about management (or mis-management) of the entire economy and the impact it is having on the lives of all Zimbabweans.
The time for self-destructive politicking is over. Let us do what has to be done to rebuild our wonderful country!