Finance Minister Dr Bwalya Ngandu has warned that any State-Owned Enterprise (SOE) that fails to perform will have its management and board face sanctions.
Speaking during the launch of the Zambia National Building Society (ZNBS) Corporate Strategic Plan and receipt of K1.5 million dividend, Tuesday, Dr Ngandu observed that there were not enough SOEs that were performing to the government’s desired expectation.
“I wish to stress that, Government through the Industrial Development Corporation (IDC), will continue with its efforts to make those SOEs that are underperforming viable to make them contribute to the Treasury. I should, however, mention as I have stated earlier that those that fail to perform will have management and boards face sanctions in accordance with the provisions of the Company’s Act that are very clear and require personal responsibility,” Dr Ng’andu warned.
“Allow me to take this opportunity to commend the ZNBS and urge other SOEs to emulate ZNBS.”
He said that board appointments should be merit-based.
“Accession to Boards will be on merit. It will be based on what an individual can deliver to the effective development of the business. 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 added.
He further directed the IDC to ensure that conditions of service were based on performance and the ability to pay by the parastatal.
“Further, cost considerations in parastatals will increasingly be an area of focus in the Ministry of Finance. Conditions of service will 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 the company’s balance sheet. Companies are formed to give value to the public; value to taxpaying citizens,” said Dr Ng’andu.
And speaking at the same function, ZNBS board chairperson David Nama explained that the ZNBS Strategic Pan had been designed as a dynamic flexible tool, and was adaptable to changes in the business environment, thereby, prompting the society to embrace innovation as a basis of deriving operational efficiency and effectiveness.
Nama subsequently led his team in presenting a K1.5 million dividend ‘dummy’ cheque to Dr Ng’andu.