Continuing dialogue on public sector management

The first step in making progress in economic, social and otherwise is to identify your problems. Once you know what your problems are, you can start thinking possible solutions.

One reason Malawi is making poor showing on the race towards development goals is that its public sector is semi-dysfunctional. Two symptoms of the ineffectiveness disease quickly come to mind.

The first is the Cashgate scandal. The men and women who are involved in it had discovered poor organisational structure, namely that thieves could not be easily detected. Indeed when at last they were detected, it was a serendipitous discovery. It was a matter of good luck not because of organisation ingenuity.

Second, we read again and again about donors calling upon the government to refund the money its officials had diverted to projects, which were not part of the agreement. If the officials were men and women of integrity, why did they misappropriate the money? Were they working under pressure from their political masters, as it often happens?

The public sector consists of three elements; the central government made up of civil servants, local government, form of decentralisation and community participation in service delivery and finally public or statutory corporations, which lie between a government department and a profit-maximising private sector firms.

The sad situation in which the Malawi Savings Bank (MSB) is at the moment is a symptom of bad policy and management by the State.

Economic and social needs of the people cannot be fully served by the public sector alone. The participation of the private sector is indispensable. When we talk of the private sector, we usually have in mind profit-making companies.

One responsibility from which the central government (policy makers and civil servants) cannot excuse itself is the overall supervision of development and social welfare activities. The government cannot render all the services that people need. The private sector is better at doing certain things than the private sector. The private sector is also better at doing certain things than the public sector. The public sector has a duty to see that those things which can be better done by the private sector are being done.

It so happens that the private sector is not willing to undertake certain commercial activities because profit rewards are uncertain. Where this is so, it is the responsibility of the public sector to provide for such services if in the long run, they will benefit the citizens.

For instance, for decades it has been noted that small and medium enterprises (SMEs) are failing to grow because commercial banks consider them too risky as borrowers. It is the duty of the State to step in and set up a bank that can extend credit facilities to SMEs. They may be given a name other than commercial bank, but their mandate should be to give loan to deserving SMEs.

The State of today has to be proactive. It must not wait for a fire to break out and they try to quench it. It identifies the needful and takes action. The State of today is developmental and entrepreneurial. The State of today accepts the fact that it is in competition with other States in ensuring that its citizens are faring better in international trade.

Policymakers must be clear on matters like centralisation and decentralisation, participatory management, customer-driven services.

Some management skills that have led to success in the private sector should be tried in the public sector, especially in the management of statutory corporations. The tendency these days is to start talking to private buyers as soon as a public corporation is in financial trouble. Have we any policy to guide us? Is privatisation always the answer to problems of a public corporation?

Time was in the past when Agriculture Development and Marketing Corporation (Admarc) was a channel through which savings were made out of cash crop sales. These savings were invested in some firms. When the monopolistic position of Admarc was withdrawn, it was believed that the private buyers would pay smallholders better. But the smallholders say the vendors are exploiting them. What do they mean those who say business is not the business of the State? n