Parastatals in financial woes, delay salaries
Three statutory corporations and a private sector business linked to a parastatal have failed to pay their employees September 2020 salaries on time, attributing the delay to cash-flow problems.
Agricultural Development and Marketing Corporation (Admarc), Southern Region Water Board (SRWB) and Airport Developments Limited (ADL) as well as AHL Group—formerly Auction Holdings Limited and is linked to Admarc—issued separate notices to their staff. The notices flooded the social media platforms on Thursday.
In a staff circular dated September 28 2020, Admarc said “management is exploring every means to source finances for payment of salaries at an earliest opportune time”.
In recent years, Admarc has been sailing in financial distress and seeking financial bailouts from government. Three weeks ago, Vice-President Saulos Chilima put his foot down on granting the organisation a bailout without a clear plan on how such funds will turnaround the institution.
Said Chilima: “Like with other State-owned enterprises, I refused to hear the word bailout, although it is clear that the K23 billion which the government owes Admarc would serve as capital injection in its commercialisation drive.”
An Admarc employee confided on Thursday that salary payment delays had become the norm at the institution for over a year.
But in a telephone interview on Thursday, Admarc chief executive officer Felix Jumbe said there was nothing strange with delayed payment of salaries as “this is normal in every business”.
He said they are waiting for payment from clients including government.
In a memo dated September 25 2020, ADL also cited cashflow challenges as the cause for delays for September salaries, but assured employees that “management is working tirelessly to ensure that the salary payments are made”.
On its part, SRWB said September salaries would delay due to low revenue arising from the impact of Covid-19 which has forced their customers not to pay water bills. The board was not readily available for comment.
For AHL Group, two separate communications to staff show that the company was also unable to pay on time in August and that September salaries will delay as well.
Reads the AHL Group communication: “Ordinarily, subsidiary companies are supposed to make their full salary contributions to the parent company, but this has not been the case due to underperformance matters in the companies. With this non-remittance, it has been left to the parent company to meet salary obligations for the entire Group.
“In addition, as you are all aware, tobacco volumes for the 2020 season dropped significantly to the extent that management has had to look for other means to sustain various business activities.”
The memo, however, unlike the August one, does not give indication when salaries will be in.
In a written response, AHL Group public relations manager Teresa Ndanga said the company was facing challenges due to Covid-19, but was able to sustain operations without job losses.
She said the company was restructuring its system and hoped that things will turnaround soon.
ADL said the closure of Kamuzu International Airport in March 2020 as a precautionary measure against coronavirus has negatively affected its operations.
In a written response, ADL said: “The closure of the airport was the beginning of cash-flow challenges for ADL because as airport managers, 80 percent of our revenue comes from rentals and concessions at the airport. For the past five months since the closure of the airport, ADL has paid its members of staff in time and sometimes even earlier than the set pay day.”
The company said the first batch of salaries was paid on Thursday.
