The cash will be used to implement more effective public financial management for state-owned firms, as well as improve performance measures and governance.

State-owned firms in Zimbabwe include sectors such as power generation, iron and steel production, water provision, and telecoms.

A government plan to improve these businesses has already had backing from the World Bank, which has started by collecting baseline data from parastatals to capture assets, liabilities and other information. The programme is intended to “reduce costs to the fiscus, enhance service delivery and improve accountability,” according to finance minister Patrick Chinamasa. 

The $4m ADB loan will specifically introduce a result-based management system within government and improve efficiency of the state enterprises and parastatal organisations.

Tonia Kandiero, ADB director general for Southern Africa regional development and business delivery, praised the government’s commitment to sound corporate governance and efforts to revive the country’s economy through improved service delivery.

State-owned enterprises have historically been a significant source of employment and economic output, but in recent years poor performance has put a strain on the national budget, she said.

“No profound change can take place in our member countries including Zimbabwe, in the absence of effective institutions with good corporate structure, accountability, culture and mechanisms to track performance.

“State-owned enterprises are key to delivering services and enabling citizens and private capital to realize their potentials.”

Welcoming the funding, Chinamasa said it would assist ongoing reforms to public sector financial management for state firms. and governance reforms in state-owned enterprises.

“The project will contribute to enhanced transparency and accountability through fostering good governance, efficiency and enforcing best practices,” he added.