Zimbabwe’s Auditor General, Mildred Chiri has questioned the viability of two government-owned telecommunication companies whose current liabilities exceed assets and have made losses amounting to millions of dollars over the years.

According to an official report focused on State-Owned Enterprises (SOEs) and parastatals, released by the Auditor General, based on the current situation, there is doubt over the ability of PowerTel Communications (Private) Limited and TelOne to continue operating.

PowerTel Communications is a wholly-owned subsidiary of the power utility, Zimbabwe Electricity Supply Authority Holdings (ZESA), and a registered ISP.

Regarding TelOne, the Auditor General said: “The entity has significant legacy loans and borrowings amounting to ZW$46 066 757 523 (2019: ZW41 604 029 523) principal plus interest accruals. The fixed-term borrowings approached maturity without realistic prospects of renewal or repayment. The conditions indicate that material exists that may cast significant doubt about the company’s ability to continue as a going concern.”

According to the report, the company had long outstanding foreign debt which amounted to US$18 586 005 as of 31 December 2020, and 75% of this debt was overdue by more than 120 days.

The report stated: “…on inquiry with the management it was highlighted that the ability to settle international creditors had been hampered by lack of access to foreign currency.”

Local economist Persistence Gwanyanya said the country’s telecommunications industry desperately needs forex in order to import equipment and infrastructure, a situation that has negatively impacted the state-owned telcos.

Gwanyanya said the window of opportunity provided by the regulator to allow the telecommunication companies to charge for their services in a foreign currency will support industry players.

The telcos did not respond to requests for comment at the time of publishing.