Ministry of Finance, Economic Planning and Development is engaging management and board representatives of various parastatals to sign letters of expectation to steer them on a profitability path.
Under the initiative, the parastatals will undergo periodic reviews on operations, generation and usage of funds.
This follows a study the ministry conducted that found that most of the parastatals were lacking knowledge on the provisions of the Public Finance Management, Public Audit and Public Procurement acts.
Speaking during the signing ceremony of the Shareholders Letters of Expectations in Lilongwe on Tuesday, Secretary to the Treasury Ben Botolo strongly condemned tendencies where parastatals fund their line ministries directly, a thing which he said was against the law.
He went on to say that there is no reason for the managers and the boards of the parastatals to be wasting money in pleasing politicians.
“There is the board and the management. The board is the overseer of what the management is saying and the board of directors is there on behalf of the shareholder. The shareholder is the Ministry of Finance because these are financial matters,” Botolo said.
He added: “Sometimes people don’t read the Public Finance Management Act but ignorance on what it says should not lead us into breaking the law. Actually, enlightenment of the law should ensure that everyone is doing his job.”
Board Chairperson of the Central Region Water Board Madalitso Mbewe said that lack of knowledge among boards and management of various government companies will be dealt with under the current initiative.
“I strongly believe that the parastatals will become profitable because the issue is lack of knowledge and where there is lack of knowledge, a lot of things can happen. But, when people are equipped with necessary knowledge, they will be able to function and do what they are supposed to do,” Mbewe said.