Government hikes boards allowances

By Deogratias Mmana & Yohane Symon:

At a time the country is facing economic turmoil, the government has doubled allowances for parastatal boards effective April 1 2023.

According to the Department of Statutory Corporations remuneration schedule dated March 2023, honoraria for the chairperson of a commercial statutory corporation has been revised from K600,000 to K1 million while board members’ and ex-officios’ package has been increased from K500,000 to K900,000.

Honoraria for the chairperson of a semi-subvented parastatal has been pushed from K500,000 to K800,000 while members of the board and ex-officios’ entitlement has been hiked from K400,000 to K700,000.

For parastatals that are fully subvented, the chairperson will now be getting K600,000 annual honoraria from K300,000 while members and ex-officials will be entitled to K500,000 from K250,000.

For every board sitting, the chairperson for a commercial parastatal will get double allowance from K70,000 to K140,000, with members and ex-officios carting home K120,000 from K60,000.

The chairperson for a semi subvented parastatal will now be getting K120,000 sitting allowance from K50,000 and board members and ex-officios will be getting K100,000 from K40,000 while the chairperson for a fully subvented parastatal will be getting K80,000 from K35,000, with board members and ex-officios getting K70,000 from K30,000 per head.

The feast further goes to monthly cellphone allowances. The chairperson for a commercial statutory corporation will now be getting K70,000 from K42,000 while those from a semi subvented body will be getting KK50,000 from K30,000.

At a fully subvented parastatal, the package has been hiked to K40,000 from K25,000. Board members and ex-officio members will not be getting cellphone allowances.

Comptroller of Statutory Corporations Peter Simbani confirmed the development.

“The honorarium is paid in equal installments quarterly. However, people should be aware that the amount for honorarium differs depending on the nature of the organisation the board is servicing. For instance, boards for fully commercial entities like Escom [Electricity Supply Corporation of Malawi] and water boards receive higher allowances than those that are on full subvention from government,” he said

Simbani said the upward adjustment is in line with prevailing economic conditions, adding that the allowance and honorarium range has not been revised for a long time.

Commenting on the issue of performance of statutory corporations in the country, Simbani said most of them are still struggling to break even, such that they are struggling to start remitting surplus amounts to the government as directed by the government during the launch of public reforms.

Simbani was, however, quick to say statutory corporations are making progress, in terms of the provision of detailed accounts, which, he said, are showing a narrow deficit as compared to two years ago.

He said this is an indication that, shortly, most of them may stop depending on bailouts from the government.

“We have seen entities like Macra [Malawi Communications Regulatory Authority], Malawi Bureau of Standards and others remitting profits to the government every year. We hope to make this a trend across the board and that is why we are meeting with boards to share notes on how best the government can help clear challenges they are facing,” he said.

He was referring to a meeting they had in Mangochi on Monday.

Simbani cited mis-procurement, corruption and conflicts between management and boards as some of the major issues that have been derailing reforms in most statutory corporations.

In his remarks, Board Chairperson for National Library Services Dickson Phiri, who is also president of the committee for the boards, blamed lack of resources as well as poor coordination between board members and management for the poor performance of most statutory corporations.

“When the boards were being appointed, they found management which was not qualified in some cases and the process of replacing them has been a difficult one. And, also, some members within the management [team] are not willing to change and adopt the new direction, which is another challenge we are facing,” Phiri said.

Meanwhile, Centre for Research and Consultancy Director Milwad Tobias has said the revision of allowances is an admission by the government that the Kwacha has lost its value.

Secondly, he said, most parastatals have posted losses, according to the 2022 Economic Report.

“As such, it is absurd to reward board members who have taken statutory corporations to loss positions. The upward revision may push some board members, especially those who have nothing to do for a living, to meet often, contrary to regulations, hence there is a need to ensure that board meetings are taking place according to the law.

“We need to change the policy so that allowances of board members are tied to performance. In terms of governance, if they post losses, board members must own the losses and, to this end, why is the government rewarding them in the midst of such losses? The policy needs to be changed,” Tobias said.

Examples of commercial parastatals are Airport Development Limited, Lilongwe Handling Limited and Malawi Accountants Board while semi-subvented bodies include the Agricultural Development and Marketing Corporation (Admarc).