The planned partial privatisation of TelOne and NetOne, is still in progress according to Finance Minister Mthuli Ncube. The minister also disclosed that the government will be keeping a over quarter of the stake in both TelOne and NetOne.
Coming to TelOne and NetOne, these again have been partially privatised. We have made a decision that they are being privatised as a bundle; as a package and as Government, we agreed to sell down our equity down to 26 percentFinance Minister – Mthuli Ncube
Well, according to the man himself, the 26% mark is fantastic for the government as it gives them some control over decision making, in case the board goes haywire and decides to act outside the best interests of Zimbabweans. That’s what I think he was trying to say but here is what he said:
There is something magical about 26 percent equity stake because this is the minimum level you need to be called a significant minority so that you can block any unpleasant prejudicial decisions by the board
A story of missed deadlines & no investor confidence…
Though this is a welcome update, it seems clear that the government hasn’t been able to complete privatisation of these two in the timelines they set for themselves. Back in October, parastatals were given 6-9 months to undergo partial privatisation and now 8 months have passed by with not much in the way of progress. Unless something drastic occurs, I’ll be surprised if any of the parastatals acquire investors in the next month.
Zimbabwe is in a very precarious state right now (economic crisis and all) and that might be one of the reasons deterring investors from dedicating millions into mostly run-down parastatals. The fact that most of these parastatals were already making losses and have huge debts prior to the economic downturn might not make them the most attractive investments.