Chief Executive Officer for conglomerate Press Corporation Limited (PCL) Ronald Mangani has expressed worry over the growing tendency by Ministries, Departments and Agencies (MDAs) seeking financial assistance from private sector players in the name of Corporate Social Responsibility (CSR).
Mangani was speaking in Lilongwe on Wednesday when he made a presentation during the 2024-25 pre-budget consultation meeting.
He said the government must establish a rule that prohibits MDAs from seeking direct funding from the private sector through CSR requests.
“I am saying this because, from where I sit now, I receive millions of requests for extra funding from ministries, departments and agencies of the state for their activities, which activities are the very reason for which we as corporate and natural persons pay tax.
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“The fact that MDAs are coming to ask the private sector is a reflection of a failure of the governmental system because the reason why we pay tax is to fund the very same MDAs,” Mangani said.
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He was quick to note that he is not propagating that private sector firms should not engage in CSR activities.
The one-time Secretary to Treasury said taxation is an involuntary initiative on the part of the state in order to mobilise for the provision of goods and services which the private sector would otherwise not provide by itself.
The PCL chief said CSR budgets of the corporations should be voluntary contributions by the corporations in those very same sectors.
“One of the compromises that arises is if I am operating in the education sector and the Ministry of Education comes to me for a request to fund something within the ministry, I know that the ministry is a policy holder and as an operator in the private sector I know that I would have need for recourse in the Ministry of Education.
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“It influences the decision that I am going to make with reference to whether I should provide the requested funding or not,” Mangani said.
The PCL chief also asked the government to abolish the Department of Statutory Corporations.
“I make this recommendation riding on the observation that was made by Oxfam which says that the Secretary to the Treasury should be empowered to ensure that he exercises oversight over state owned enterprises in order to improve on their performance.
“The Secretary to Treasury is the custodian of government assets. The existence of the Department of Statutory Corporations which is an administrative structure which has nothing contributory to the running of state owned enterprises is a hindrance to the ability of the Secretary to Treasury to exercise oversight of state-owned enterprises,” he said.
Mangani has also asked the minister of finance to abolish the 10 percent extra tax on the excess of K10 billion of the profits generated by banks.
Mangani observed that the government has no moral authority to create some semblance of the conditions that no longer exist.
According to Mangani, if the government does that, it loses its honesty, it loses its integrity and it creates an animal farm scenario.
On recovering the economy, the renowned economist said if there is one thing that should wake the finance minister in the middle of the night, then it’s weak production.
He said authorities need to ask themselves as to what extent its interventions are contributing to growing the economy.
Taking his turn, Chithyola Banda said the ministry is doing more listening during the pre-budget consultations.
According to Chithyola Banda, when the consultations are concluded, technical officials from his ministry will compile all the suggestions and see which ones would be incorporated in the 2024-25 national budget.
