Mugabe urged to sell state firms to help economy

President Robert Mugabe’s government should immediately sell more than a dozen state firms to help raise money for the embattled economy, Zimbabwe’s central bank Governor Gideon Gono said on Wednesday.

The privatisation of loss-making state firms would yield up to $3-billion this year, easing a foreign-currency crunch in the struggling Southern African nation, Gono said in a monetary policy statement.

”The resolute implementation of the privatisation programme remains a viable route through which government can unlock immense value, both in local and foreign exchange terms,” said Gono, who for the past three years has spearheaded an effort to revitalise Zimbabwe’s sinking economy.

Mugabe’s government has talked about plans to privatise dozens of state firms, ranging from the national airline to a tractor plant, but analysts claim it holds onto the unprofitable enterprises as part of political patronage programme.

Gono said the government must overcome its fears of selling shares in some companies regarded as ”strategic investments” because they are costing too much in state subsidies, helping to fuel inflation, which is running at more than 1 200%.

In a schedule accompanying his monetary statement, he suggested the government immediately sell some shares in Air Zimbabwe, the Zimbabwe Iron and Steel Company and 13 other state-owned or controlled firms.

A carefully rolled-out privatisation programme could meet Zimbabwe’s need to raise crucial foreign exchange and help boost funding for health care, including the country’s fight against HIV/Aids, Gono said, adding that a delay could hurt the country’s chances of bouncing back from a prolonged recession.

An economic crisis that many critics blame on Mugabe’s policies has left the once-promising country grappling with chronic shortages of food, fuel and foreign currency as well as rising unemployment and poverty. — Reuters

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