Government firms in K14.2 billion loss
BWB tops list, seconded by Escom
Commercial companies owned by the Malawi Government have posted an aggregate loss of K14.250 billion in 2023, an analysis by Treasury has shown.
The analysis was presented by Director of Public Finance Management in the Ministry of Finance, Martha Chizimba.
It took into consideration the performance of 28 State-Owned Commercial Companies which include Airport Development Limited, Agricultural Development and Marketing Corporation (Admarc), Blantyre Water Board, Central Region Water Board (BWB), Lilongwe Water Board, Electricity Generation Company of Malawi, Electricity Supply Corporation of Malawi (Escom), Malawi Communications Regulatory Authority and Lilongwe Handling Company.
Other firms captured in the analysis are Malawi Broadcasting Corporation, Malawi Energy Regulatory Authority, Technical, Entrepreneurial and Vocational Education and Training Authority, National Oil Company of Malawi, National Economic Empowerment Fund and National Food Reserve Agency.
Topping the list of 2023 loss makers is BWB with a loss of K21.069 billion followed by Escom with a loss of K11.499 billion.
Northern Region Water Board is third with a loss of K5.822 billion followed by Admarc at K3.953 billion.
According to the analysis, in 2020, the commercial firms posted an aggregate loss of K25.341 billion.
In 2021, the loss was recorded at K14.44 billion before it went up again to K17.295 billion in 2022.
The analysis further shows that the commercial firms are anticipating an aggregate profit position of K17.676 billion in 2024.
“We aren’t doing really well in terms of profitability,” Chizimba said.
She also indicated that on the trading side for 2023, authorities estimated a net loss position of about K1.7 billion but that when it came to mid-year, the position changed and showed an aggregate loss of about K27 billion.
“So we have projected an aggregate profit position of about K9 billion but we will wait until mid-year to see how best we are going to perform within the year.
“These are traders. The same situation goes for the semi-subvented and fully-subvented organisations,” Chizimba said.
On Monday, Finance Minister Sosten Gwengwe expressed worry over the performance of the State-owned companies and dared them to start posting profits and giving back dividends to the government.
Gwengwe also condemned what he described as high levels of extravagance in the companies.
“It is particularly worrisome to see an increasing trend of extravagance demonstrated by huge administrative costs and internal control lapses at the expense service delivery.
“Concerned institutions do not serve the interests of the general public as per the mandate for which they were created. This is not acceptable and I will not allow it to continue,” the minister charged.
Comptroller of Statutory Corporations, Peter Simbani, admitted that there were problems in some government-owned companies.
He said his office will continue to facilitate the recruitment of qualified and highly competent management teams for the companies.
Simbani said a highly competent and reform-oriented management is critical in turning around a loss-making entity into a profitable one.
“We still have some State corporations that do not work with us on corporate governance matters and that creates a problem as it leads to non-alignment with government policies.
“I believe that these being government agencies, they ought to align themselves with government policies,” he said.