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Make profits, Members of Parliament tell parastatals

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Ned Poya

The Public Accounts Committee (Pac) of Parliament has challenged State-owned companies to devise strategies of making profits and pay dividends to the government.

Pac was reacting to sentiments by Comptroller of Statutory Corporations Peter Simbani that several parastatals are making losses and turn to government coffers for survival.

Simbani said there are several factors that lead to government firms failing to make profits one of them being abuse of resources and misprocurement.

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“Then there are parastatals like water boards that are owned money in bills by State agencies. All these issues affect the financial performance of our parastatals,” Simbani said.

Pac has suggested that a turnaround decision should be made to bring change to the parastatals so that they start making profits for the government.

Pac Vice Chairperson Ned Poya said “the time for honeymoon for parastatals is over”.

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“They should start registering profits; they are supposed to remit dividends to the government. It does not make sense that poor Malawians in our villages should be funding their lifestyles,” Poya said.

He added that save for institutions that have a social responsibility like universities, other State-owned companies that have been failing to remit dividends to the government should be closed.

However, Simbani said there are different initiatives being undertaken to address the parastatals’ failure to make profits including capacitating responsible officers and strengthening financial departments to have well-trained accountants to do proper reconciliations.

He warned public officers that sanctions in the Public Finance Management Act will be issued if they fail to do their work properly.

During the meeting, it also came to light that some government companies were involved in unlawful contract price adjustments.

Simbani said according to procurement provisions, price adjustment in the course of a project is put at 15 percent as a maximum and that approval is supposed to be sought from the Public Procurement and Disposal of Assets Authority if the amount is above 15 percent of the contract price.

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