Parastatal performance remains subdued despite government instituting reforms in over 40 State-owned enterprises three years ago.
In an interview yesterday, professor of finance and corporate strategy at the Malawi Polytechnic James Kamwachale Khomba said parastatals are failing to devise new revenue streams and improve efficiency because the reforms are yet to translate into action.
This comes against the backdrop of five parastatals posting losses at the end of December 2017, according to the 2018 Malawi Annual Economic Report, with the rest of them posting reduced profits.
He said: “It seems we are good at planning, but implementation is a nightmare. We don’t learn to translate our plans into action, what is happening on the ground is completely different from what is on paper.
“We have brilliant policies and strategic issues, but what happens on the ground is completely against what we do.”
When approving parastatal reforms in October 2015, President Peter Mutharika recommended the finalisation of State Corporation Policy, review of all outdated mandates of some parastatals and the State Corporation Act.
The reforms were also expected to see parastatals operating on commercial basis.
However, three years down the line, most parastatals are failing to turn the corner.
Figures contained in the government annual economic report indicate that at the end of December 2017, statutory bodies generated 46 percent of overall approved revenues while expenditure was at 33 percent on average.
As a result of reduced profitability, expected returns in the form of dividends to government were also reduced at mid-year with only 36 percent of the budgeted dividends remitted to government.
In the review period, Blantyre Water Board (BWB )recorded a loss after tax of K699 million from K4.1 billion in the 2016/17 financial year while Southern Region Water Board recorded reduced profit of K69 million from K596.7 million during the same period.
Electricity Supply Corporation of Malawi, National Oil Company of Malawi, Malawi Institute of Management and Malawi Enterprise Development Fund posted losses as of December 2017, according to the report.
Earlier, Minister of Finance, Economic Planning and Development Goodall Gondwe said government is contemplating garnishing assets of parastatals at the bank to enforce their dividend payments.
Budget and finance committee of Parliament chairperson Rhino Chiphiko said the underperformance of parastatals is worrisome and affects the national budget.