FINANCE minister Dr Bwalya Ng’andu says under his watch, he will not allow government business to be driven by the hand-out culture as opposed to economic objectives.
He says State-owned enterprises (SOEs) must be profitable to operate.
Dr Ng’andu added that he will not financially support SOEs that do not provide him with credible business plans that show clearly where the board and management would like to take the company, in terms of profitability.
The minister was speaking during the launch of the Zambia National Building Society (ZNBS) corporate strategic plan for the period 2019-2023 and receipt of dividends from the Society in Lusaka yesterday.
“I would like to emphasise a few issues on our expectations from government investments. Firstly, government’s investment in State-owned enterprises is not a social activity. Investments in SOEs are for the purpose of getting a reasonable return to allow government mobilise resources to meet other developmental needs,” Dr Ng’andu said.
“Therefore, subsidising companies is not an option. Under my watch, I will not allow government business to be driven by the hand-out culture as opposed to economic objectives. SOE’s must be profitable to operate.”
He added that effective business plans should be the basis for driving business decisions.
“In this regard, it is necessary that all State-owned enterprises have updated business plans in place which should be lodged with my ministry. It is upon these credible business plans that any support will be considered by my ministry,” he noted.
“The government will not pour money in bottomless pits that do not provide value to the public.”
Dr Ng’andu also indicated that all boards and management would be appraised, based on the effective implementation of business plans.
He said no board tenures and management renewals would be granted for SOEs that failed to have business plans that were effectively implemented.
“We will base renewals on effective performance in the achievement of the key strategic objectives. Accession to boards will be on merit. It will be based on what an individual can deliver to the effective development of the business,” Dr Ng’andu pledged.
“Appointments will therefore take into consideration the experience, expertise and technical capacity of members who will be evaluated based on business models and plans.”
He also pointed out that cost considerations in parastatals would increasingly be an area of focus in the Ministry of Finance.
The minister said conditions of service would be linked to performance and the ability to pay.
“I am therefore expecting the Industrial Development Corporation Group and boards of those companies still under my Ministry to ensure that conditions of service are drawn based on effective performance and the financial health of the company’s balance sheet,” said Dr Ng’andu.
“Companies are formed to give value to the public; value to taxpaying citizens.”
ZNBS board chairman David Nama said the Society was at a critical point.
He highlighted that notable among the achievements scored during the previous corporate strategic plan was that the ZNBS entered into a Memorandum of Understanding with the Public Service Management Division (PSMD) for special concessionary loans for public service employees to access affordable credit.
He explained that the ZNBS expanded its geographical presence by opening a branch in Nyimba, Eastern Province and extended its presence in Lusaka at Cosmopolitan mall.
“In an effort to deliver affordable housing to the public, ZNBS acquired parcels of land in Nyimba, Chilanga, Chikakanta, Chisamba, Kabwe, Kitwe, Chililabombwe, Kalumbila, Chembe, Mansa, Kawambwa, Mwansabombwe, Mpika and Kasama districts from the respective councils,” said Nama.
“Partnership with National Pension Scheme Authority (NAPSA) for the provision of mortgages at 14 per cent interest per annum with a repayment period of 30 years for buyers of houses at North Gate Housing Estate in Lusaka [is the other achievement]….”