Bad governance costs IDCZ Govt funding
Corporate governance deficiencies and management shortcomings saw the Government holding onto allocated budget funds meant to recapitalise some of the subsidiaries of the Industrial Development Corporation of Zimbabwe (IDCZ), Business Weekly can reveal.
IDCZ falls under the Ministry of Industry and Commerce, which had only spent 9 percent of its budget allocation.
Data obtained from the Ministry of Finance and Economic Development shows that the Ministry of Industry and Commerce spent only 9 percent of the budget estimate of $2,4 billion for the year or about $214 million during the first half of the year.
Analysts had questioned the low spending at a time more funding was needed to boost industry capacity.
Apart from the Industry and Commerce Ministry, the Ministry of Information Communication Technology and Courier Services as well as the National Housing and Social Amenities Ministry also spent just 9 percent of the budget vote.
At national level, an average of 41 percent of total budget was expended against a half year target of 45 percent during the period under review. The Ministry of Industry and Commerce, however, explained the reasons behind the below expectations spending.
“The big chunk was for IDCZ and the shareholder felt spending the money on IDCZ was a matter of letting the public funds go down the drain given weak corporate governance and management shortcomings at IDCZ,” Dr Sekai Nzenza, Industry and Commerce Minister told Business Weekly.
“That has since been rectified and substantial amount will be spent on the IDCZ.”
The Government has appointed Winston Makamure as new board chairman following the stepping down of renowned industrialist Mr Charles Msipa while Collin Mutingwende is now acting general manager.
According to local media reports, chairpersons of various subsidiaries were also dismissed.
Dr Nzenza said significant amount of money will now be invested in its the fertiliser subsidiaries ahead of the forthcoming farming season.
“You can’t let money go where you know it can be wasted,” said Dr Nzenza.
Having been in business for the last 56 years, the IDCZ, a wholly owned state entity has transformed and built an investment portfolio, with the core being in the sectors of motor and transport, fertiliser and chemicals, cement and agro-processing.
It’s subsidiaries include Chemplex Corporation, Sunway City, Industrial Sands, Willowvale Motor Industries and Deven Engineering. It’s associate companies are Olivine Industries Zimbabwe, SINO Zimbabwe Cement Company, Surface Wilmar, Zimbabwe, Zimbabwe Grain Bag and Afroran Spinners.
In 2018, Government approved restructuring strategies of IDCZ subsidiaries and associate companies through the State Enterprises and Parastatal Reform Framework.
The restructuring is not only confined to total disposal subsidiaries and associate companies, but also entails liquidation, privatisation and partial privatisation.
Meanwhile Dr Nzenza said government was finalising the final list of successful bidders Zisco after eight potential investors submitted bids.
“We want an investor who want to participate in the entire value chain in alignment with the President’s vision of value addition, reduce imports and create jobs,” said Dr Nzenza.-ebusinessweekly.cl.zw
