Causes

Accounting and auditing Problems

Lack of accountability in both performance and operations coupled with cut off of accounting
processes, unsound internal control and inadequate safe keeping and security of documents has
contributed to so many corporations to fail. Furthermore, the inability of audit reports to provide
early warning signal to owners and regulatory bodies has tremendously affect so many
businesses, and questioned the integrity and adequacy of audit job in general. For example,
Concerns were also raised over the Zimbabwe Electricity Transmission and Distribution
Company (ZETDC) which incurred losses totalling ZW$924 576 859 (Compated to ZW$2 348
661 135 in 2018). The power utility’s liabilities exceeded its current assets by ZW$5 168 114
975 (2018: ZW$4 794 391 397).
lack of Transparency

Companies holding a strong position on a given market while being managed without the
necessary degree of transparency and prudent corporate governance policies are exposed to be
the hotbeds of abusive market practices. If abusive market practices are followed by leading
business participants with strong market positions, the consequences will most likely hurt
competition as well. For example, REA levy outstanding as at 31 December 2019 amounted to
ZW$224 392 693 (2018: ZW$108 465 723).  The Company had debtors amounting to ZW$2.2
billion as at December 31, 2019 (2018: ZW$1.1 billion). The debtors age analysis revealed that
45% of the Company debtors were aged 90 days or more. The Company received loan amounts
from Ministry of Finance and Economic Development. However, there was no agreement for the
loan amounts. As a result, there were no stipulated terms of repayments and interest. As at
December 31, 2019, the amount outstanding was ZW$1 179 454.

Absence of Accountability

The relationship between the government and the people governed rests on accountability on the
part of those who were elected by the people to serve the nation in any capacity. When the
leaders no longer care about the opinions of the people in respect of decision making, there is a
breakdown of that cordial relationship. This results into making of arbitrary decisions, taking
questionable actions which are more often than not contrary to the interests of the populace. For
example, 34 state-owned enterprises failed to submit their financial statements for audit, while
54 audits were still in progress and 52 audits had been completed.

Corruption

This has undoubtedly been the biggest problem facing Zimbabwean parastatals. But how can one
describe corruption? There are many variations of corruption. As far as governance is concerned,
corruption is when a leader uses his position to place himself and chosen individuals at a higher
advantage than others without merit. Zimbabwe Parks and Wildlife Management
Authority (ZimParks) was awarding each board member 300 litres of fuel per month, without
ministry approval. There was no evidence to show that the monthly 300 litres of fuel per board
member had been approved by the parent Ministry. The fuel allowance was given from January
to September 2018. I also noted that the fuel allowance was not taxed.

Disregard of the Rule of Law

When a person in authority begins to act outside the scope of his powers, there is the certainty
that what follows next will be the trend of horrendous administration. African governments
especially in some countries have little or no regards for the law, court decisions and
fundamental human rights. The issue of corruption can be attributed to the election of non-
credible leaders into different offices. For example, Infralink (Private) Limited received a
garnishee order for understated Income Tax and Value Added Tax (VAT) of US$46 977 476 in
2015. Management did not accrue for these amounts because they contend that the tax status of
the Company is still to be established.

Incompetence in Leadership

One of the factors behind bad governance in African States is the unappealing sight of the
political sector filled with nonchalant leaders. Politics here should be addressed in a wider and
more general view. A good political structure is one that is built upon the regard for persons
qualified to lead to be afforded the right opportunity to justify the qualification. In simpler
words, if a person is entitled to appointment or to run for an election, the person should not be
restricted because of gender, ethnic or religious background and other insignificant
considerations. The Mining Promotion Corporation had no substantive Chief Executive Officer
since 2016 whilst Petrotrade did not have a Board of Directors since 2015.  Some parastatals
were paying board allowances that had not been approved by the minister while others grossed
up board fees and also paid board members sitting allowances for attending workshops

Mismanagement

In addition, the Procurement Regulatory Authority of Zimbabwe had to write off US$2. 39
million due to inadequate contract information, which resulted in the failure to adequately collect
amounts owing. Auditor general was not convinced with the accuracy of administration fees
amounting to US$1 514 280 (in 2016) and US$1 329 650 (2017) and the existence and valuation
of related trade receivables amounting to US$2 380 983 (2016) and US$717 200 (2017)

Question 2 Possible recommendations to VP

Having highlighted the reasons behind bad governance and the consequences, this article will
attempt to recommend possible solutions which should also be considered feasible as well.

1. The Government should be more accountable to the people. Accountability is one aspect of
governance that if lost, can cause a breakdown of law and order. The leaders, whether appointed
or elected, should represent the interests of the entire nation in all their functions and not only
when it benefits their religion, tribe and so on.

2. There should be increased transparency among the Government and its institutions. When the
administrative heads and Governmental leaders are more transparent in their actions, that will
automatically be a proactive step to stop corrupt practices in their dealings. On this note, the
government should put in stringent measures to proscribe corruption from anyone put in the
position of leadership.

3. Institutions for building competent leaders should be established and if already established,
should be increasingly financed. As everyone knows, bad leadership equals bad governance.
This is not to say that there have been no or there are no good leaders in Africa.

The issue is whether this will be a seasonal experience. Institutions should be created solely for
the purpose of training men and women to be useful, industrious and competent leaders in any
sector that has their interests. There are some that have been established for that purpose but lack
the necessary financial boost. They should be financed and monitored by the Government at
regular basis.

4. Parliamentary measures should be enforced to put an end to corruption among governmental

The Legislature, being the law making arm of government, should enact laws that not only
penalises it but ensure that no one will be an exception. There are laws in existence but are silent
in certain matters which gives political governors loopholes to escape. That should be addressed
sooner than later. Good governance rests on the rule of law over the governed and the
Government.

5. There should be regard for the fundamental rights of citizens particularly the right against
discrimination. All genders, ethnic, religious and tribal personalities should be considered when
making decisions. They should also be afforded opportunity to work in key positions in
government from the local level to the federal level as long as they are qualified.

6. Lastly, there should be no tolerance for incompetent leadership in any office in Government.
This statement stands true: Show me your leader and I will tell you what your country will be. A
good leader is a competent leader.

Especially when it comes to appointment, there should be no allowance for favoritism on any
angle in respect of a person who is not qualified for the position. Not even ethical standards
should be the sole basis of appointment. A competent leader should be holistic because
governance is not just one sided.

Additional

Causes

Corruption

Local authorities in Zimbabwe have been manned by a series of corrupt activities. Corruption is
an act in which the power of public office is used for personal gain in a manner that contravenes

the rules of the game Jain (2001). Palmier (1985) Corruption is the misuse of public power by

elected politician or appointed civil servant for private gain. Therefore from these definitions one

can say that corruption is characterised by the use of funds which were meant for development

purposes for one’s personal desires and council officials and councilors are involved in

corruption and some of them have been expelled from the local authorities. Embezzlement of

funds by council officials has led to poor governance since the funds will not be used for the

purpose which they would have been provided for by the central government and other donors.

ZIMBABWE has been manned by corrupt activities and this can be evidenced by an article
presented by

a newspaper the new [Link] on 14 October 2015 which stated that beer halls manager
Raphael Karanda was suspended because of corruption and he had embezzled which

amounted to $100 000 which was seen after an internal audit, hence council officials engage in

many corrupt activities such as bribes, fraud ,misallocation of resources and embezzlement of

[Link] it can be noted that through corruption the good governance principles of

transparency and accountability are undermined which in turn lead to poor governance and

corruption is one of the most serious unethical practices that undermine trust and confidence of

public officials.

Lack of transparency and accountability

Transparency and accountability seem to be a challenge in many local authorities. The online

business dictionary defines accountability as the obligation of an individual or organization to

account for its activities, accept responsibility for them and to disclose results in a transparent

manner. A typical definition is that accountability concerns the processes by which those who
exercise power whether as governments, as elected representatives or as appointed officials, must

be able to show that they have exercised their powers and discharged their duties properly.

Meyer (1995) defines accountability as the responsibility of government and its agents towards

the public to achieve previously set objectives and to account for them in public. However, local

authorities are not accountable for their actions and in terms of use of public funds there seem to

be lack of transparency. Transparency is when officials in the public service give reasons for

their decisions and restrict information only when the wider public interest demands [Link] the

causes of poor governance can be attributed to low accountability environments as well as lack

of transparency. Harare Town Council can be said that it is not responsible its use of money

and other properties as there is no transparency and the officials are not accountable for their

actions when there is shortfall of funds after an internal audit has been conducted.

Lack of ethics and professionalism

Ethics and professionalism are essential elements which are expected of public officials.

Professionalism encompass all other values that guide the public sector such as loyalty,

neutrality, transparency, diligence and all other values that may be specific to the public sector

individuals UNDESA (2000). The Public Service in Africa Article 21 states that professionalism

manifest itself in the public service employees behavior at work and in his constant effort to

improve, reinforce and update knowledge that is necessary for carrying out tasks. Hence from

these definitions it can be noted that there is indeed lack of ethics and professionalism since

some public officials are not able to carry out their duties due to lack of knowledge and skills on

that particular task and there is lack of principles such as transparency and dedication. Kanyane

(2010) explains that within the context of the public service, leaders and managers need to

possess high standards of ethics and professionalism. There is a code of conduct that ethically
guide the behavior and conduct of public functionaries and their relationships among themselves

and with the citizens in Zimbabwe. Hence it can be noted that these values seem to be a

challenge since public officials quarrel with the customers and they do not have the public

interests at heart.

Conflicts

The conflicts within the council officials themselves seem to hinder good governance and these

conflicts are caused by clashing interests and different ideologies. Politicization of the local

authority has additionally created clashes Politicization of local authorities has generated

conflicts among locals resulting in some people boycotting local development meetings

depending on who has called the meeting. Since 2004 an unprecedented wave of popular and

violent protests has flowed across the country. In Harare, residents have not been paying

their rates saying that the Town Council is not providing required services to the community

Chirisa (2010). Due to some incompatibility of goals among the staff of local authorities

resulting in long standing disagreements reduces the quality of service delivery The political tie

which comprise of councilors and chamber Chairman appear to contradict the choices that are

made by the committee authorities and some don't turn up on meetings relying upon who has

assembled the conferences as pointed out by the director of housing and community services

during an interview with the researcher. At ZIMBABWE the council Chairman suspended the
Town

Secretary who was alleged to have refused to implement some council resolution delegated to

him by Council Chairman and the Board of Directors. This action stirred conflicts between

internal management as well as the councilors hence this disturbs governance system at the local

authority as outlined in the Sunday Mail of 24 Aril 2016. More so due to the decline in service
delivery there are conflicts between resident associations in which the Harare residents and

ratepayers association Chairperson states that council officials should resign or be relieved of

their duties for failing to deliver basic services to residents as cited in the Sunday Mail of 27

March 2016. Hence failure to resolve internal conflicts professionally and peacefully by the

council Chairman who ended up suspending the Town Secretary is a sign of poor governance at

ZIMBABWE.

Political interference

Political interference and politicization of local government has been blamed by various

stakeholders for some of the challenges facing local authorities in Zimbabwe Olum (2011).

Many Urban Councils have succumbed to the political ambitions individuals and have failed to

implement projects. Additionally, unfair criticism, sabotage and caucusing stall decision-making

on development issues including unnecessary interference in revenue generation, budgets,

programs and projects and other similar local initiatives Olum (2011). Support for opposition

parties has seen some people of Harare Town being frustrated and alienated from local

government activities in areas controlled by the opposition parties especially after 2013

Presidential elections. In such cases, Makumbe (1996) argues that ruling party leaders sometimes

are seen mobilizing locals to oppose Council policies and projects while urging them to support

and participate in projects initiated and funded by non-governmental organizations.

Furthermore, ACPDT (2002) asserts that party politics has been as destructive for local

government as drought is for Zimbabwe. Local government structures are dying because they

served politics and not development. Councilors are pressurized into taking political stands,

rather than representing local interests hence compromising service delivery Makumbe (1996).

After an interview with the high council officials they also cited political bickering as a cause of
poor governance in which they cited that the council is run by councillors who have different

views and interests hence it will cause misunderstandings. Councilors are pressurized into taking

political stands, rather than representing local interests hence compromising service delivery

Makumbe (1996). Thus one can comment that political interference in local authorities have led

to poor governance because it disturbs internal governance structures and creates factions

amongst council staff and councilors.

Question 2

The corporate governance framework should promote transparent and efficient markets, be
consistent with the rule of law, and clearly articulate the division of responsibilities among
different supervisory, regulatory and enforcement authorities;

• The corporate governance framework should be developed with a view to its impact on overall
economic performance, market integrity, and the incentives it creates for market participants and
the promotion of transparent and efficient markets;

• The legal and regulatory requirements that affect corporate governance practices in a
jurisdiction should be consistent with the rule of law, transparent and enforceable;

• The division of responsibilities among different authorities in a jurisdiction should be clearly

• Supervisory, regulatory and enforcement authorities should have the authority, integrity and
resources to fulfil their duties in a professional and objective manner. Moreover, their rulings
should be timely, transparent and fully explained.

The section on shareholder rights has been amended to cover the central issue of board and key
executive remuneration. Boards are now expected to formulate and disclose a remuneration
policy highlighting the link between remuneration and performance in the long term.
Shareholders should be able to make their views known about this policy and any equity
component should be subject to their approval;
• Shareholders should be able to remove board members, and their effective participation in the
nomination and election processes should be facilitated;

• Institutional investors acting in a fiduciary capacity should disclose their corporate governance
policies, how they decide on the use of their voting rights and how they manage conflicts of
interest that may compromise their voting. Restrictions on consultations between shareholders,
including institutional investors, about their voting intentions should be eased, subject to control
of some potential abuses; and

• Impediments to cross-border voting should be eliminated.