Friday, July 11, 2014 Local time: 22:47

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Most Zimbabwe State Enterprises Slated for Privatization Are Heavily Indebted

State Enterprises Minister Joel Gabuza said investors interested in state-controlled enterprises lined up for privatization should be prepared to take over their debts

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Gibbs Dube

Zimbabwean business sources say most of the state enterprises the government has slated for privatization are heavily indebted and laying off workers, adding that potential investors in companies like Air Zimbabwe fear they will assume the debts as part of an acquisition then lose control to senior ZANU-PF officials.

They said investors want legislation in place that will protect them from political interference. Many Zimbabwean parastatals are run by retired army officers with ties to the state security apparatus.

State Enterprises Minister Joel Gabuza told VOA Studio 7 reporter Gibbs Dube that investors interested in national companies lined up for privatization should be prepared to take over their debts. "This should be part of the package if ever an investor is interested in these enterprises," Gabuza said.

Air Zimbabwe is moving to lay off more than 400 workers to trim a monthly operating deficit of some US$2 million.

Other parastatals like Cold Storage Company, National Oil Company of Zimbabwe, the Grain Marketing Board have not paid workers for eight months or more and have multi-million dollar debts to creditors, sources said.

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