Minister damns government companies
As Admarc, Blantyre Water Board, Neef, Tobacco Commission emerge worst performers
Finance Minister Sosten Gwengwe Monday expressed concern over the performance of some State-Owned Enterprises (SOEs) which continue to plead for bailouts instead of giving back to the government.
He singled out Agricultural Development and Marketing Corporation (Admarc), Blantyre Water Board (BWB) and the National Economic Empowerment Fund (Neef) as the worst performers in the trading sector.
In the regulatory sector, the Tobacco Commission (TC) has been highlighted out as the worst performing.
Gwengwe was speaking in Lilongwe during the signing ceremony of the 2023-24 Shareholders Letter of Expectations with all the country’s 72 SOEs.
He has since challenged every SOE to justify its relevance or risk being disbanded or merged with others to stop wastage of public resources.
The minister also took a swipe at SOEs which reportedly continue to spend lavishly at the expense of service delivery.
“Of particular concern is the issue that I also emphasised last year about the laxity and general entitlement for SOEs. This has been heightened by the continued misconception among SOEs that money generated and the profits or surpluses realised belong to them.
“This misconception of ‘it is our money’ has been demonstrated by the conduct of the concerned SOEs and I know them,” Gwengwe said.
He went on to say he is particularly worried to see an increasing trend of extravagance demonstrated by huge administrative costs and internal control lapses at the expense of 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,” he said.
The minister also expressed concern over the laxity by the SOEs in submitting audited financial statements some dating back to as far as 2018.
“The backlog, dating back as far as 2018, is more prevalent in the subvented organisations while untimely submission is most common among commercial parastatals. This non-compliance is affecting my ministry to timely produce and lay before Parliament a consolidated SOE report as required by law,” Gwengwe said.
Comptroller of Statutory Corporations, Peter Simbani, said his office would continue to facilitate the recruitment of qualified and highly competent management teams for State corporations.
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,” Simbani said.
During the signing ceremony, Gwengwe announced plans to rate the SOEs from best to worst.
On the best performing SOEs in the trading sector, Egenco tops the list followed by Lilongwe Water Board (LWB) and Airport Development Limited.
The list of best-performing regulators is topped by Malawi Communications Regulatory Authority, followed by the Technical, Entrepreneurial and Vocational Education and Training Authority and the National Construction Industry Council.
Egenco Chief Executive Officer (CEO), William Liabunya, described the recognition as exciting, saying Egenco managed to stand out despite the challenges the power generating company faced due to the outage of Kapichira Power Station.
On his part, LWB CEO, Silli Mbewe, said his organisation was proud with the recognition from government, attributing it to LWB shared mission, vision and team work.
“If you look at our service mandate, we are here to service the people of Lilongwe in terms of potable water supply. And now we are taking over the sewerage services.
“This recognition will propel us to do more, particularly when it comes to making sure our customers are satisfied all the time,” Mbewe said.
But TC CEO, Joseph Chidanti Malunga, disputed the ranking of his organisation being the worst regulatory SOE.
“Our operations are based on production and the production is weather based. Last year, instead of having 125 million kilogrammes (kgs) of tobacco, we ended up with 85 million kgs because the weather was not favourable.
“The second factor is that the financial year changed from 12 months to nine months. Rather, the beginning of the financial year changed. Therefore, the previous year ended with nine months.
“The cut-off point was March and by March, we had not started making income yet. We open the market around April. So when they had cut off the financial year, it meant that we were still not in the income-generating period,” Chidanti Malunga said.