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Business cautious on Admarc privatisation
By
Ephraim Munthali - 15-08-2002 |
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Ecama believes govt will save
The business community and economists in the country have hailed government for privatising Admarc but have warned that the transition, if not carefully handled, may have negative impacts on the rural poor.
Malawi Confederation of Chambers of Commerce and Industry (MCCCI) president Jimmy Koreia-Mpatsa said in an interview yesterday turning Admarc into a commercially oriented entity has to accommodate nonviable markets for the sake of the poor.
“There is need to conduct a survey to find out how viable all the Admarc markets are in terms of business and assess how to compensate for markets that are not viable. Some markets may not be viable but government has a duty to provide services,” said Koreia-Mpatsa.
He added: “The danger is that if a proper assessment is not conducted, certain markets may be assumed to be unproductive and therefore non profitable and will be abandoned, but a survey may prove that with proper marketing skills, some of them could be viable in future.”
He said Admarc is a strategic institution which plays a key role in providing ready markets and other services to poor communities.
Koreia-Mpatsa said farmers will still need markets when the institution is commercialised, saying the absence of markets for farmers’ products will worsen poverty levels in the country.
“If government can find ways of solving these problems, then yes we welcome the privatisation of Admarc because we believe that commercial operations can be handled best by the private sector,” he said.
Economic Association of Malawi (Ecama) public relations officer Osten Chulu said in a separate interview on Tuesday Admarc’s privatisation will save government millions of kwacha in subvention.
He, however, said caution should be taken in commercialising the entity by addressing poverty issues first before going ahead with the process.
Chulu said Admarc is a strategic enterprise which serves both the business community and government in implementing poverty reduction objectives.
“By privatising, you are going to make it more profit oriented, which is a good idea. But to do that Admarc will have to minimise costs of transactions by abandoning social markets which are not viable to a private organisation to make profits and remain in business,” said Chulu.
“We need to be cautious here by combining profit making and continuing to serve the poor. To do this government will have to subsidise Admarc in areas where it will be doing social services,” he added.
Commercial Bank of Malawi (CBM) assistant general manager (economic services) Fred Kanjo said privatising Admarc is positive for the economy because it will now run on a commercial basis and save government money.
Last week, secretary for finance responsible for economic affairs Maxwell Mkwezalamba told Weekend Nation that when Admarc starts operating on commercial basis, it will decide which markets to operate depending on their viability and profitability.
The process of privatising Admarc will start in earnest when a bill to turn the parastatal into a limited liability company to be presented in parliament next month passes.
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