Zimbabwe to 'abandon' privatisations

Air Zimbabwe faces collapse as money runs out

Economically troubled Zimbabwe is reportedly preparing to abandon its privatisation programme due to national security concerns.

"There is a deliberate policy shift by the government, which now wants to ensure the viability of key parastatals rather than selling them off," a Privatization Agency of Zimbabwe (PAZ) official told state media.

Air Zimbabwe, the heavily indebted airline, Zimbabwe Electricity Supply Authority (Zesa), National Railways of Zimbabwe, the National Oil Company of Zimbabwe and TelOne were named as state-owned companies that may now not be sold.

The southern African country is in the midst of its worst economic crisis since independence in 1980.

Political turmoil resulting from President Robert Mugabe's controversial land reform policy also means the sales may not have attracted foreign investors.

Strategic interest

"Concentration is now on commercializing the entities in order to turn around their fortunes without selling them because of their importance to the country," the PAZ official told state radio.

"Such strategic companies cannot be entrusted into the hands of anybody because this may compromise national security," the official said.

PAZ advises the government on privatisation of public companies and is expected to lead the commercialisation programme.

In his 2001 budget speech, former finance minister Simba Makoni said that the government would speed up privatisations to help pay-off accumulated interest on foreign debts of $488m.

Since then, the state has only sold its equity in the Cotton Company of Zimbabwe and Dairibord Zimbabwe.

Troubled

On Tuesday, a Zimbabwean parliamentary inquiry said the national airline was one of the worst international carriers and could collapse because of the economic crisis and cash shortages.

Two of Air Zimbabwe's six planes are grounded because there was no hard currency to buy spare parts, the head of the inquiry Silas Mangono told ZBC.

Mr Mangono said Air Zimbabwe, the only carrier still flying in the country, would make an operating loss of $21m this year.