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How parastatals became sick

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Joyce Chitsulo

From being reduced to mere commodities of political patronage to lacking operational and business direction – this is how most of Malawi’s parastatals have fallen.

And as they languish in the clutch of politicians, as they fall to a democratic culture of abuse of law and as they slip deep into misgovernance, their mother body, the Department of Statutory Corporations, seems hopeless and frightened on the job.

These were some of the observations by members of the Public Appointments Committee (Pac) of Parliament during their meeting with Comptroller of Statutory Corporations, Nwazi Nthambala and her team in Lilongwe.

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Recounting the chaos in the statutory bodies, the MPs questioned whether she was is in control.

“Are you in control? Or there is political interference?” charged one of the members of the committee, Collins Kajawa, as he quizzed Nthambala on why National Oil Company of Malawi (Nocma) performance keeps going down and it keeps seemingly listening to no one.

“Why is it that Nocma is becoming increasingly difficult to handle?” he asked.

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The MPs questioned her why it has taken a year for the department to recruit a Chief Executive Officer for Nocma.

Member of Parliament for Mwanza Central, Mark Katsonga and Member of Parliament for Mulanje Bale, Victor Musowa, lamented that some parastatals have become bankrupt but continue being ran on taxpayers’ money.

To exemplify the sickness of the parastatals, the committee cited Malawi Posts Corporation, which it said is about to lose some of its buildings because the organisation is failing to pay back the loan it acquired from a bank in China to purchase buses that are failing to bring money to the institution.

“I wonder why a telecommunications company would turn into bus business. Why should we allow such a parastatal go into a wrong business? This shows the Comptroller has no powers and is just a figure head,” Musowa said.

Interestingly, government owes MPC over K8.7 billion in appropriation arrears for 16 years.

The committee further observed that most of the organisations are becoming moribund and have fallen to abuse by politicians as some of them were formed by presidential decree way back and not an act of Parliament.

Pac has demanded that this must be fixed.

It has charged the Department of Statutory Corporations to initiate the process that will see Parliament come up with an act that would improve the governance and operations of the institutions.

Chairperson of the committee Joyce Chitsulo ordered Nthambala and her team to speed up this process.

“It is high time we changed how parastatals are ran. Politicians have been taking advantage of most of the parastatals when it comes to the appointment of CEOs, for example.

“They have been favouring their kinsmen, some of them without proper qualifications to run the parastatals. This should come to an end,” Chitsulo charged.

In her response, Nthambala informed the committee that recruitment of Nocma Chief Executive Officer is expected to take place soon after the Board concludes disciplinary hearing of former officials.

She said the disciplinary hearings were scheduled for yesterday.

“While there are delays in concluding some disciplinary actions, it is important to note that these are matters of law. The officers have specific contracts of employment and the boards are treading carefully to avoid legal suits. Nonetheless, we should have a meaningful progress within 21 days,” Nthambala said.

She said her office will push to conclude appointments of Chief Executive Officer in all the parastatals where the offices are vacant.

Responding to the performance of the parastatals, Nthambala pointed out that the culture of not wanting to adhere to the law is among the factors for their sickness.

“Democracy has resulted in some people taking the law in their hands. They don’t mind being in the wrong; they don’t care if their companies are struggling. We have missed the meaning of democracy,” Thambala said.

Executive Director for Centre for Social Accountability and Transparency (Csat) Willy Kambwandira welcomed the proposal by Pac to put in place a Statutory Corporation Act.

He also called for performance and functional review for all the statutory corporations to determine whether some parastatals should be closed, re-organized or allowed to continue.

“In our view this is good move to have the Statutory Corporation Act. However, we expect that the process to put in place the act will be open, participatory and inclusive.

“But more importantly, it is high time that we managed the presidential powers and decrees,” Kambwandira said.

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