By GRACE CHAILE LESOETSA
STATE-OWNED Enterprises (SOEs) need to be evaluated on an annual basis to see whether they are running efficiently and cost effectively, economic analyst Yusuf Dodia has said.
And the Economics Association of Zambia (EAZ) says quarterly and annual financial reports of all SOE must be made public for public scrutiny and proper corporate governance issues.
In an interview, Mr Dodia, who is Public Sector Development Association, said a review should be done on an annual basis to assess the sustainability of SOEs especially that Government pumps in money.
“It’s extremely important that all State-owned enterprises need to be evaluated on an annual basis to be able to see whether they are running efficiently and cost effectively. There some companies that you may find that they need to be restructured because they cannot be running in the best way possible.
“Covid-19, exchange rate and cost of energy can play a part in the way these companies are running and it’s always important to do a review to understand what the dynamics are,” he said.
EAZ president Lubinda Haabazoka said a review of State-owned companies was a must because their performance is an issue critical to the Zambian economy.
Mr Haabazoka said if these companies performed poorly, there was risk of a drain on national coffers.
“Boards are very important for Stated-Owned enterprises as they act as an ear for Government, they control the strategic direction of the company and are answerable to the performance of a particular enterprise,”
“Boards should be able to review quarterly performances and overall performance in a particular financial year and this reports should be made public so that there is also public scrutiny and proper corporate governance issues because the government cannot continue pumping in resources to safe guard the employees of that particular companies,” he said.
EAZ was happy that some companies were posting profits.
Mr Haabazoka hailed Zamtel and Zesco for increased efforts to ensure profitably. He was however unhappy that companies like Ndola Lime were still faced with serious financial issues. The EAZ president said SOEs should behave as if they were operating in the private space and compete favourably without having Government to step in.
Government still has about 32 SOEs on its books under the Industrial Development Corporate, 17 of which are loss-making and draining Government finances.