Returning the ‘Public’ and ‘Public Service’ to our State Owned Enterprises.

A presentation to the Transparency International-Zimbabwe Ethics and Accountability Forum on the Annual State of Corruption Report

Thursday 25 June 2015, Sapes Trust Seminar Room, Harare.

By Takura Zhangazha*

Cde Chairlady, Ladies and Gentlemen,

Let me begin by thanking Transparency International Zimbabwe (TIZ) for inviting me to share some reflections on their very important Annual Corruption Report for 2014.  Especially because this report focuses on the functions and ethical (or lack of it) conduct of our state owned enterprises or as we have been wont to call them, parastatals.

This a report that is both interesting and depressing because it correctly depicts the reality that all is not well in the 78 or so SOEs that operate in the country. From its summation of the manner in which salary scales for chief executive officers were borderline ridiculous, unclear tender procedures through to its articulation of lack of accountability and transparency this report sets out a daunting task for policy makers and members of the public to rectify these unfortunate anomalies in how SOEs are managed.

An important aspect that however emerges from the report is that of the structural challenge of how SOEs are managed. The key question around this touches on the problems of political interference, militarisation and multiple regulation of parastatals by different line ministries. These essential challenges of SOE administration, and as correctly cited in the report under consideration invariably lead to a lack of transparency and corruption.

It is these structural challenges around SOEs that I would like to focus on in this brief presentation. By doing so, I am aware that there are key ideological questions at play where and when it concerns parastatals.  Their role in relation to statecraft or development fall largely within the ambit of two key schools of thought. These being the ‘free market’  or liberal economics and alternatively that of a state controlled economic framework. The latter is often times referred to disparagingly as either socialism or communism.

In Zimbabwe’s specific case,  and as outlined in the report, the history of our parastatals derives in part from the legacy of the settler state which established same said entities to protect minority privileges and services but within the context of a liberal economy.  In the post independence era, these SOEs were then primed to begin to serve a majority but within the context of the then declared socialist or state centric ideological ambit.

This soon gave way, with the advent of the economic structural adjustment (saps) to the commercialized or semi-privatised version of parastatal. (There was some privatization of SOEs, for example Dairiboard and Cotton Company of Zimbabwe)  It is this hybrid model that informs a majority of existent parastatals today. 

In the recommendations outlined by the authors of the report, it is posited that in order to circumvent the culture of corruption that informs these SOE’s, there is need for a structural realignment of the regulatory framework to make it not only singular but also independently managed. Other recommendations which are more options than hard and fast include those of learning from the experiences of China and Singapore, privatizing the SOEs, legislative changes, raising the costs of corruption and further training on accountability for employees of these entities.

These recommendations are very much in order and would, if implemented, go a long way in curtailing corruption not only in SOEs but also in our society as a whole.

The key question that however remains unanswered is that of the ideological framework.  It is imperative that we understand that the hybrid version of commercialized parastatals is what has been one of the primary causes of the endemic levels of such corruption. It is a model that neither serves the best public service interest nor promotes the profit and self sustenance models that many free market advocates would want to see becoming a reality.

Government, in using the commercialization model sought to combine both the profit motive with the public interest motive. The end result has been runaway boards and chief executives that apart from giving themselves perks have also failed to make any of the entities stay afloat let alone successful.

It would, in my view, be critical that we begin to look at the SOEs, as an extension of the obligation of the state to provide services in a manner akin to the generic social contract.  

This would entail a social democratic perspective which would be characterized by understanding our local context and applying models that primarily seek to serve the best public interest. Simultaneously, a baseline as to the state’s obligation to keep these services going in the public interest is of paramount importance. The guiding principles must be that everyone must have access to basic services such as water, electricity, transport, education and health. For those SOEs that are in the extractive industry sector, there must be an accountability framework that not only circumvents corruption but that explains how resources acquired and sold for a profit feed into a symbiotic sustainability cycle for all other public services. 

It would also require that we take a step back and identify what has been missing from the liberal economic and socialist (for lack of a better phrase) frameworks.  In this, I am confident that we will see that we have been pandering to global solutions that have been crippled by limited application to local context. The lack of sustained public pressure on the glaring levels of corruption would be further indicative of the fact that our country’s citizens are not aware of the values that SOEs are informed by. They tend to view them as part and parcel of the general state and private entity tendency toward corruption and lack of accountability.

So we need to act on imbuing a sense of democratic public interest service to our parastatals that goes beyond the legal and builds a broader democratic culture of accountability.

This would mean the panacea would not be wholesale privatization/commercialization or re-nationalizing of the SOEs but to demonstrate their primary necessity in the process of providing goods and services to the majority poor in our society.  That way, accountability would then become part and parcel of expectations of service with citizens going out of their way to defend these SOEs against corruption of any kind.

We have to keep the public service element intact within these SOEs. This can be done by, as correctly recommended in the report, looking at internal accountability mechanisms, professionalization and independence of those selected to be at their helm and democratic decision making as to the efficacy of their privatization or commercialization.

Where we fail to do so, the ‘public’ and ‘public’ interest will be lost to the SOEs and the elite will continue to not only abuse these parastatals but also protect each other and their roles in them.

ENDS//

Takura Zhangazha writes here in his personal capacity (takura-zhangazha.blogspot.com)

Messrs Kasukuwere and Chombo's Muddied View on Access to Water as a Right.

By Takura Zhangazha*

During a recent and as is wont, rather theatrical question time session in the National Assembly, cabinet ministers Saviour Kasukuwere (environment, water and climate) and Ignatius Chombo (local government) were asked about water.  One of the questions related to government policy on pre-paid water meters and the other concerned the disconnection of water supplies to urban residents respectively. In both of their answers they used the phrase ‘transmission of water’. 

This was in reference to central government policy position that while water is for everyone and also given as a second generation right in the constitution, it is how it arrives at your doorstep that you are being charged for. Hence the opportunistic and deceptive use of the word ‘transmission’. 

For the few citizens on a regular and fixed income, this would appear to make sense. Except for the fact that we are already paying fixed water charges in urban areas. Even if some of us are defaulting, it is not because we want to but because we do not have the money. It would however be an exercise in the dehumanizing of other citizens to then posit that where one is poor, they have no access to water.

The real issue behind the intention by government is to privatise water. That is, to immediately limit access to a public resource on the basis of lack of immediate cash. It also gives private entities the greater and profitable responsibility in delivering water to citizens through outsourcing issues such as the provision of the technology required, its maintenance and servicing and passing on the cost to the end user.

Such a move entails that water becomes a ‘free market’ commodity, which though being one of the most naturally abundant resources, will serve to line the pockets of those that issue tenders and those in close proximity to the former.

Because of this, the end effect of such privatization is to pass the cost on to the consumer/citizen. And if the profit margins fall, it is up to the company to say it has gone out of business and therefore cannot continue to provide the public interest service of clean water to a city or country. Such a development would not easily be similar to for example a bank’s closure, because water is a necessity in the day to day lives of human beings. To subject it to the vagaries of the market is therefore to deny citizens the right to life.

Of course, private interests and citizens in financial comfort zones will make the argument that a prepaid water meter is not the same thing as actual privatization. Truth of the matter is that, in our context, it is.  A pre-paid water meter does not dispense of water if there is no credit to a specific user’s account. As is already the case with electricity pre paid meters, the service ceases to be available immediately where one does not have the money to do so.  The undemocratic flaw there is that where its pre-paid, it means a lack of money leads to no water at all. 

Due to the fact that it is government that has initial control of all water on behalf of the people, there are expectations that policies related thereto are people centered and social democratic. And please note that water, unlike oil or diamonds, is readily available in a country such as ours.  Apart from building dams to store and utilize it for renewable energy, it does not always require the highest resource investments (technology, money) that other natural resources do.

What is required is policy honesty on the part of central and local government.  The problem of payment for water is not that residents are resistant to paying a nominal monthly fee for water treatment and delivery. We have been doing so since our national independence. 

Instead it is the fact that government intends to commoditise a resource that occurs naturally to the extent of ensuring that if you have no money, you will not get it. In the process, and acting on the dehumanizing desperation of many, government will outsource a public service to profit motivated interests.

 Whichever way one wants to look at it, this is a patently undemocratic and inhumane intention on the part of government.

A water meter does not have to be pre-paid nor expensive. It can be a water meter that is efficient for the purposes of recording how much water was used and charging a universally affordable rate for minimum use of the same. To want to stop the taps from running for lack of immediate money in every other household is the stuff that profit mongering over what should be a universal and necessary natural resource is made of. They might as well proceed to place pre-paid meters on rain-clouds. 

Takura Zhangazha writes here in his personal capacity (takura-zhangazha.blogspot.com)

African Union, ICC and the Omar Al-Bashir Incident of the Flight in the Day Time

By Takura Zhangazha*

Before the end of the 25^th Ordinary summit of the African Union (AU) had officially occurred in Johannesburg, South Africa, a serving African president had fled from an African country.  Omar Al Bashir, President of Sudan, wanted by the International Criminal Court (ICC) for war crimes and crimes against humanity allegedly committed in the Darfur region of his country could not get the protection of the AU or the host government  from the South African judicial system. The Southern African Litigation Center had decided to seek his arrest in lieu of the fact that South Africa is signatory to the Rome Statute and thus has legal obligations to enforce judgments of the ICC.

In an urgent hearing, South Africa’s High Court found that President Zuma’s government was obliged to arrest, with the intention of transferring President Bashir to the Hague to face trial. By the time a final judgment on the matter was delivered, the accused was halfway on his journey back home.

Now there are many ways to look at this.  The easiest is to follow the lead of the mainstream global (Western) media and simply argue it’s the case of an African ‘despot’ fleeing the clutches of global (also read as Western) justice.  This point is made even more salient by the general derogatory attitude toward African leaders and their ‘democratic’ credentials or lack of them, especially when they have the much vilified Zimbabwean President, Robert Mugabe at the helm of the AU.  

There is however no doubt that Al-Bashir did escape arrest or the law, but one cannot be sure about escaping justice until every other state/government leader who has a semblance of an accusation of human rights violations is also seen to be equal before the ICC. Ditto the United States, the United Kingdom, the European Union, Russia, China, Australia and India (among others).

The second way is to simply wear the cloak of anti-imperialism and act as though Africa or even the Global South are victims of world history.  This would entail forgetting that the ICC is not a mandatory international court even though it has a great bearing on international relations.  South Africa, in this case the host country, voluntarily signed up to the Rome Statute, and its courts, whatever one’s opinions, are interpreting and enforcing the law.  

The same can be said of other African countries that signed the establishing conventions of the ICC (and there are many) as and when such cases arise.  And indeed they have arisen, with persons such as Laurent Gbagbo, Bosco Ntanganda, being referred to the ICC by African governments. So there is voluntary African participation in the ICC which cannot be wished away for its instrumental political reality. 

While there has rarely been a uniform continental response to international events or institutions by African countries or the AU, it is true that in some cases the ICC has served the direct interests of African governments (and in some cases people). Selective use of the ICC is actually much higher than its selective and outright rejection to the extent that the anti-imperialist tag won’t wash.

The third perception is perhaps the more realistic one that is in tandem with a 'Mbekite' view of Africa’s placement in world politics.  Predicated on the fact that Africans must find African solutions to African problems, this view would seek to solve the Sudan crisis and issues of crimes against humanity initially through African led mediation, an African court of Justice and with a long term view of not only compensating victims but rehabilitating the perpetrator.  All in attempted aide of democratic posterity for the continent. 

I am sympathetic to this view because it is grounded in both the idealism that brought African liberation but also grounded in a realistic assessments of global politics.  It’s primary challenges are however not only the slow pace of institutional reform of the AU but also the general ineptitude of political leadership of member states and even the continent. This is because most of the problems, in the case of al Bashir, the civil war in Darfur, are caused by an inability of African presidents/governments to understand not only local and historical dimensions but also international aspects to conflicts in pursuit of peaceful solutions.

In the final analysis, the urgent issues that need to be addressed are not limited to the lack of universality of the ICC, especially where and when it concerns members of the UN Security Council, but a tragic lack of domestic and continental rule of law institutions in a majority of AU member states or on the continent. While the AU has the African Court on Human and People's Rights, its weakenesses and lack of continental confidence remain tremendous challenges.  

That we have to seek recourse to the ICC points to a deficit of such institutions of justice on the continent. Moreover, it also points to the fact that we are still burdened by the fact that we cannot prevent such atrocities, even if alleged, from occurring. Where we were to do that, as Africans, we will not have to send our alleged war criminals across oceans to face justice at the instigation or support of those that will probably never have to answer for their own alleged crimes against humanity.  

*Takura Zhangazha writes here in his personal capacity (takura-zhangazha.blogspot.com)

The MDCs' Scramble for Joice Mujuru:Putting their Carts Before their Horses (Sadly So)

 By Takura Zhangazha*

Zimbabwe’s mainstream opposition, now in the form of a number of MDC offshoots, has been having a bit of a spat over former Zanu Pf second secretary and national vice president Joice Mujuru. 

It began with the MDC Renewal’s Elton Mangoma, in the throes of factional fighting, accusing his then leadership rival, Tendai Biti of liaising or at least wanting to join Mujuru in her newfound political endeavours.  

A few days later, Biti retorted that it would be the height of idiocy for them not to seek some sort of political pact with the former vice president.  Though he also stated that it was highly unlikely that he would ever form a similar coalition with Morgan Tsvangirai, the leader of the largest opposition party in Parliament.

Not to be outdone was the MDC-T spokesperson, Obert Gutu, who warned Mujuru against taking the MDC-R seriously because in his own words, ‘they don’t have numbers’.

Add to this the wannabe mediator voice of Simba Makoni and you have an opposition falling over its feet trying to be in Mujuru’s loop.

In return, the spokesperson for the still to become a  physical reality People First, Rugare Gumbo, confirmed meeting with some of these outfits to sound them out. He is also reported to have said that they are looking for those with numbers on the ground.

While avoiding mirth, one can be forgiven for thinking that it is Joice Mujuru who has been in opposition politics all of this time.

A key question is how it is that contemporary and long duree opposition parties are caught wanting to curry favour with their one time and rather obtuse rival over and above their own programmes of action?

Of the opposition parties in the mix, only one is actually fully constituted. This being the MDC-T.  It held a congress and has a national leadership elected from the same for a reasonable period of time. 

The other parties that are clamouring to be at Mujuru’s table have nether held full elective congresses in the aftermath of the 2013 harmonised election. And they are all in parlous internal states with factionalism, defections and resignations.   

Moreover, none of these parties have so far articulated an alternative post 2013 national program to rival the generally defunct Zanu Pf one of ZimAsset. Even where they have a substantive national leadership.

Instead, their national plans of action appear to either split, cause further splits within splits, cause by elections they do not participate in and then immediately thereafter seek coalitions with personalities that have been their rivals all along.

This is however not to say coalitions are a bad thing in themselves.  One only needs to look a the Kenyan example of multiple collations toward general elections to get an idea as to how these may work.  It was the National Rainbow Coalition that defeated ruling party candidate Uhuru Kenyatta in 2002.  Eleven years later it was another coalition, the Jubilee Coalition that eventually brought Uhuru Kenyatta to power. 

The key difference is that those opposition parties that joined electoral forces all had their own initial programmes and organizational capacities that they brought to the coalition table. 

In our Zimbabwean contemporary case, the collective opposition is not in a state to form a serious or organic coalition among the old players or the much vaunted new player on the scene.  At least for now.

What would be required is for each of the opposition parties to get their internal affairs in proper democratic order, articulate their national visions and then seek out broad coalitions. 

The default route, which can be appealing for its populism, to merely gather personalities together and claim a grand coalition, will sad to say, not work.  There will be scrambles and disputes over leadership positions and uncoordinated presentation of the overall national agenda of such a coalition. As already evidenced already by the media spats over who Mujuru should join forces with.

The saddest thing though is that for all these years, the opposition has not learnt to continually stand its own organic political ground .  It has to wait for Zanu Pf to help it find a new cause along the way.  Its own issues get clouded in the dust of factionalism, petty personality differences and an unfortunate propensity to seek international recognition before all else.

Perhaps, this time things will be different. Perhaps there will be a statesman/woman that will emerge from this raucous opposition politics in Zimbabwe. But on the basis of current events, it will be tremendously hard work for democratic success to be realized. If only for the country.

*Takura Zhangazha writes here in his personal capacity (takura-zhangazha.blogspot.com)

Bond Coins, Bananas and Bonding Ourselves to International Debt

By Takura Zhangazha*

A couple of weeks back I sought to buy a couple of bananas from a young man pushing a wheel-cart. I had the rather ubiquitous South African two rand coin and handed it over to him. He looked at it and calmly handed it back asking, ‘Don’t you have bond coins?’  As it turns out I did not and he advised that he could not sell me the bananas given the fact that the bond coin was benefiting from the slip in value of an actual currency that is the South African rand. If he did, he said, then it would be his loss and my gain.

Apart from my surprise at the fact that my money was relatively useless to him, I respected his reasoning over the impact the sale of two bananas would have on his business.

It also turns out that at the time I attempted to purchase the bananas, the bond coin had stronger local value than the rand, even though the former is not an actual currency.

When the bond coin was introduced late last year, the Governor of the Reserve Bank, Dr. Mangudya justified it on the grounds that it would improve small change transactions particularly where it concerned the retail and banking sectors.  And fair enough, there had been a publicly acknowledge problem of people being given notes, sweets and other small items in lieu of change.

But even when they were launched, these bond coins were received skeptically by the public. Not least because of a latent fear of the return of a Zimbabwean currency and the memories of our hyper-inflationary period. In short there was an evident lack of trust that the bond coin was of any actual monetary value. 

Well as it turns out, it is.  As the actual term suggests, the bond coin is a result of a US$50 million dollar bond that we have with the African Export-Import Bank (Afreximbank). Or to be less euphemistic, we are using these coins on the basis of a loan agreement that we have with the aforementioned institution. We came to an agreement that over a period of time, the Afreximbank gives us a loan and we promise to pay it back with or without interest.

For economists and banking/financial experts this is nothing out of the ordinary as it is standard global business practice for governments, banks/companies to issue bonds to governments and other institutions. The only surprise may be the fact that as a result of our ‘bond’ we have a mimic 'currency' called a ‘bond coin’. 

All the same it is important to understand that the main reason why our bond coin now trades better than the rand nationally is that its value  is pegged to the United States dollar and also backed up by the US$50m that we owe Afreximbank.

This might perhaps be a small part of the international debt, estimated to be at least US$7 billion.

It would however still be trite to posit that the bond coin is therefore a direct everyday symbol and example of Zimbabwe’s ongoing debt crisis.  Even if it appears to be demonstrating utilitarian value in day to day transactions as was the case with the banana selling entrepreneur I encountered.

Every time we use that bond coin we are transacting in debt.  Or to use a Thomas Mapfumo line from a song off  his latest album, Dangerzonetitled, ‘Chikwereti’, it’s a debt that shall be wanted and with interest.

But even then there are more questions that must be thought about.  Who exactly is benefitting from the trade and speculation in bond coins?  Alternatively, how long and what are the key conditions of the ‘bond’ we have with the Afreximbank intended to last and whether the intention is to renew it or extend it?

The Reserve Bank has already announced that it has independent (read as private) auditing firms that will closely monitor the usage of these bond coins. This is well and good, but the end effect is now with the everyday citizen who might now be more vulnerable to what appears to an unpredictable money market for those that cannot access the actual real value US dollar.

The onus to protect ordinary traders and citizens obviously lies with the Reserve Bank and its stakeholders. Unfortunately for now, in the midst of all these transactions and since November 2014 there is no Reserve Bank Board to play an oversight role on the governor.

In the final analysis however, it is the trust that my friend the banana hawker has in the bond coin that will always be problematic.  He may not know this, but it is part of a national burden and debt over and above its utilitarian relief.  I just hope he does not keep a sack of those coins at home.  

*Takura Zhangazha writes here in his personal capacity (takura-zhangazha.blogspot.com)