privatisation

Privatisation of state utilities essential to aiding government performance
During the years of economic decline the country’s infrastructure and companies charged with maintaining these became out-dated, ramshackle and the economic consequences are now quite apparent. In most cases the decay in the nation’s infrastructure began well before the accelerated decline of this past decade and this decay had an effect of making the economy less competitive and less efficient.  Power generation, rail transport, telecommunication which are some of the vital services that aid economic prosperity yet in the last decade these were simply not provided for adequately or efficiently hence impacting greatly the economy’s competitiveness. For instance during its heyday the rail transportation system used to handle the bulk of the country’s and the region freight needs and given the rail road infrastructure, its vastness this undoubtedly made it the freighter of choice. In fact this was the preferred form of transportation because it was not only economical but efficient as well and ultimately these factors would eventually show in the final cost of production. However the obliteration of this important organisation is well documented and now the entire infrastructure is in a state of derelict and this of course continues to be a bane on the economy. Power generation has of course become the biggest obstacle to not only the smooth operations of companies but individuals as well though it used to be quite efficient, the best in the region. However since the late 90s virtually every other organisation whether public or private has been deeply affected by the rolling blackouts and again this has also been impeding the economy’s recovery pace. For instance at the launch of the Mid-term plan in July bankers intimated that power shortages were directly affecting their efficiency because according to them extra costs incurred in securing alternative power sources was passed on to consumers in the form of higher fees. Now according to consumer groups these high fees or charges are in effect driving people out of the formal banking system thus contributing to liquidity problems besetting the general economy. Clearly the inefficiency of some of these government owned enterprises contributed towards the collapse of the formal economy in the last decade and certainly continue to inhibit its recovery to this point. Refreshingly though the country’s telecommunication industry has been an island of positive development since the start of the coalition government .While indeed the country’s telecommunication system particularly the fixed line network owned the government suffered extremely during the past decade, the presence of private players in this industry has helped to ensure its lightning fast recovery. In fact the figures made available so far prove this. Now for instance according to figures released by the finance ministry the country now ranks fourth in the region with regards to mobile phone penetration at 66% while internet bandwidth usage has increased 400% since 2009. This has all happened while the state owned entities remain in a state of comatose thus driving home the point home that the only way the country can escape from this straitjacket is by disposing controlling stakes in these parastatals. Of course some officials might baulk at the mere mention of selling Air Zimbabwe for instance, yet disposing controlling stake or finding a partner is the only way the government can have it back in the air. Anything short of this will only help to exacerbate the deficit and debt problems and of course this will mean little left for civil servants. Fortunately the government Mid Term Plan mentions what is called public-private partnerships or PPPs as the best way to revive the country’s infrastructure though it’s not clear if everyone in government is on board with this. Clearly as testimony from Zambia’s Copperfields and the diamonds in Botswana shows private capital seems better placed at managing some of these than the state. Reluctance to embrace this will only ensure that the state will remain mired in this miserable state, high wage demands from a very low revenue base meaning the government will continue to operate in this state of technical bankruptcy.