Vice-President Saulos Chilima has called for the need for the consolidation of government debts to parastatals to find a lasting solution to the problem.
The Vice-President, who is also Minister of Economic Planning and Development and Public Sector Reforms, has since recommended that a team comprising ministries of Trade, Finance, Economic Planning and Development and the Department of Statutory Corporations should come up with a proposal to resolve the challenges.
He said parastatals were facing challenges in their operations because government owes them money.
Writing on his Facebook page on Thursday evening after meeting officials from the Agricultural Development and Marketing Corporation (Admarc) and Smallholder Farmers Fertiliser Revolving Fund of Malawi (SFFRFM), Chilima said the money owed will play a critical role in the parastatals.
He said: “Like with other State-owned enterprises, I refused to hear the word bailout, although it is clear that the K23 billion the government owes Admarc would serve as capital injection in its commercialisation drive.”
Chilima said Admarc should have a turnaround strategy that would enable it turn into a sustainable company while keeping its social arm.
On the part of SFFRFM, which government owes K3.2 billion, Chilima said the parastatal would be instrumental in implementation of the Affordable Input Programme.
He also said it was inspiring to note that SFFRFM was in a healthy financial position with no tax arrears and that Malawi Revenue Authority (MRA) owes it K392 million in value added tax (VAT) returns.
In addition, the Veep also pledged support towards the reforms to establish a fertiliser plant, open a fertiliser quarantine facility and establish a fertiliser buffer stock to guard against external shocks that could disturb supply.
Later the same Thursday, Chilima also engaged Blantyre Water Board (BWB), National Berbalium and Botanical Gardens, Pestcides Control Board and Soutern Region Water Board (SRWB).
The Vice-President commended SRWB for the progress in implementing reforms, including smart energy solutions, pre-paid billing meters and reduction of non-revenue water. The reduction in non-revenue water is projected to save the board K1 billion.
For BWB, Chilima said he was disappointed that the board had backtracked on the progress earlier made to the point of registering a K8.9 billion loss in the 2019/20 financial year.
He said: “Worse still, non-revenue water has gone up from 37 percent in 2018 to 54 percent in 2019/20.”
But Chilima applauded BWB for moving to reduce energy costs by sourcing an independent power plant.
Currently, the Veep is holding technical meetings with officials from different parastatals as part of the public sector reforms that fall under his ministry.