Zimbabwe Plans to Sell or Close Loss-Making State Companies

(Bloomberg) -- Zimbabwe’s finance ministry is planning comprehensive reforms of all the nation’s state-owned companies, including liquidation, forming joint ventures and the outright sale of some businesses.

The government will seek input through the ministries under which the respective state entities fall, Finance Minister Patrick Chinamasa said in a statement handed to reporters in the capital, Harare, on Tuesday.

Zimbabwe’s state-owned companies have long been a drain on the country’s finances, said Chinamasa. Loss-making businesses owned by government include Air Zimbabwe, Zisco, an iron and steel mill, the Grain Marketing Board and National Railways of Zimbabwe.

By October, government businesses had made a loss of $206 million for the year and of the 93 state-owned companies, “70 percent of them were either technically insolvent or illiquid,” Misheck Sibanda, chief secretary to the cabinet, said at the time.

The reforms come as Emmerson Mnangagwa, the 75-year-old who took over as leader of the southern African country in November after the military pressured Robert Mugabe into resigning, try to revive an economy that has halved in size since 2000. The southern African nation is straining to pay over $9 billion in debts to creditors such as the African Development Bank, credit lines from most lenders have been withdrawn and infrastructure has crumbled.

The suggested reforms will be presented to cabinet, Chinamasa told reporters, without giving a timeline

To contact the reporters on this story: Brian Latham in Harare at blatham@bloomberg.net, Godfrey Marawanyika in Harare at gmarawanyika@bloomberg.net.

To contact the editors responsible for this story: Karl Maier at kmaier2@bloomberg.net, Rene Vollgraaff, Jacqueline Mackenzie

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