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| Business |
| Ommission of report on parastatals irks groups |
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by
Ephraim Munthali, 15 September 2004
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19:14:27
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Civil society groups have demanded that Finance Minister Goodall Gondwe present a comprehensive report on how state-owned companies performed last year and announce detailed turn around strategies.
Society of Accountants in Malawi (Socam), Malawi Economic Justice Network (Mejn) and the Consumers Association of Malawi (Cama) said Wednesday they were “disturbed” and “shocked” to note that Gondwe did not include a report on parastatals in his budget speech to Parliament two weeks ago.
It has been a tradition for the past four Finance Ministers to give the nation yearly reports on major state firms through Parliament regarding their performance and measures put in place to ensure efficiency and profitability.
But in his maiden “transitional budget”, Gondwe did not give the report.
“It is not a ritual that the budget speech should have a report on parastatals,” Gondwe said when contacted for an explanation on Tuesday.
But Socam executive director Hennox Mazengera charged that the role that parastatals play in the country’s economy is so crucial that people deserve to know what is happening in the companies.
“Some of these parastatals are so significant that if their performance is bad, they can destabilise the economy hence the need for Malawians to know about the companies,” said Mazengera.
Major state firms include: water boards, Electricity Supply Corporation of Malawi, Malawi Telecommunications Limited, Admarc, Air Malawi, Malawi Development Corporation, Malawi Housing Corporation, Malawi Broadcasting Corporation , Television Malawi Limited and Malawi Posts Corporation.
Mejn deputy national coordinator Mabvuto Bamusi said Gondwe should give an account of these firms because they benefit from public resources in form of taxes and get loans from the World Bank and other financial institutions for restructuring and major projects in the name of Malawi.
“We are not saying it is a ritual but we expect a report because the companies’s performance background will give us ideas as to whether certain allocations are justified,” said Bamusi.
He said parastatals greatly contribute to the government’s overall fiscal indiscipline and argued that the absence of a performance report is a serious issue which must be addressed.
Bamusi said although it is possible that information about the firms could be in the annual economic report, government companies should have been given prominence in the budget statement as the speech has a greater impact than the other budget documents.
“We want a report on how they performed last year and a report on what is being done to improve efficiency, profits and in some cases effectiveness,” he said.
Cama executive director John Kapito noted that although government is working hard to bring reforms in government departments, little is being done on reforming the parastatal sector.
“We are concerned that very little was said about parastatals in the budget. It is even more disturbing and shocking when it is our money that runs most of these parastatals. He must explain because we are interested to know,” said Kapito.
Economics Association of Malawi (Ecama) spokesman Perks Ligoya declined to comment on the matter, saying it is not an issue. He said government may have decided to confine parastatals to the annual economic report.
Various stakeholders have in the past accused the UDF government of abusing the parastatals by using their resources for political activities without paying for them.
For example, vehicles from Admarc, Malawi Housing and Escom among other companies have been used to ferry UDF party cadres to attend political rallies.
Observers say political interference and abuse have led to losses in the companies and landed them into financial problems which have in the past forced government to allocate billions of tax payers money in subventions to bail out the firms.
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