Malawi parastatal reforms under the microscope
A fortnight ago news came out that Malawi’s President, Arthur Peter Mutharika had approved implementation of reforms in parastatals in a last ditch attempt to free the statutory corporations from the imprisonment of Capital Hill.
Malawi’s leading daily paper, The Nation, described the move as the boldest step so far towards taking politics out of statutory corporations, a decision the paper said could bring decision making independence in parastatals by taking out fear of political reprisals for professional choices deemed politically incorrect.
The business-like approach to the running of parastatatals, the paper added, should improve service delivery, generate more revenue that could boost dividends to government, make the organisations competitive and bring operational efficiency never seen before.
“This means that Capital Hill will let the statutory corporations devise new revenue streams, become completely depoliticised and sharply cut government subventions—thereby easing Treasury of fiscal burdens it can do without,” reported the paper.
Meanwhile, to ensure smooth implementation from legal obstacles, President Mutharika has ordered a review of the country’s legal and regulatory framework governing the management of parastatals.
This will include the quick finalisation of the State Corporation Policy, review of all outdated mandates of some parastatals and re-evaluation of the current status of the State Corporation Act.
WATER SECTOR REFORMS
As part of the reforms, the water sector is set to undergo major transformation that would see the introduction of a regulatory authority to deal with issues of overpricing, inefficiencies as well as bringing in private players in the industry.
Some of the generic reforms in the sector include diversification of revenue through bottled water and implementation of pre-paid water meters, a move meant to give customers value for money as well as saving bill printing costs on the part of the water boards.
Specifically, the five water boards in the country will be implementing various reforms apart from the generic ones with the Southern Water board planning to outsource water testing to Chancellor College.
This will help boost confidence in consumers that an independent body will be doing this task.
Overall, specific water boards will meanwhile also implementing various reforms that include introduction of leak detection system as well as introduction of mobile billing.
TRANSPORT SECTOR
The six reform areas that the Airport Development Limited ADL will be implementing the Common Use Terminal System (CUTE) check in system, introduction of automation of airport car-parks, and installation of conveyor belts at Chileka and KIA.
The CUTE system is the in thing elsewhere where airports operational team no longer requires dedicated check-in counters but will use the same airport gates, desks and workstations, greatly increasing the volume of traffic that can be accommodated by the infrastructure.
EDUCATION
Reforms will see the education sector establishing Public Private Partnerships (PPPs) and Joint Venture arrangements for student accommodation and other infrastructure developments as well as introduction of cost-effective fees in the wake of realisation that elsewhere quality education is not cheap.
The Malawi National Examination Board (Maneb) will also be abolishing the Junior Certificate of Education (JCE) but the Primary School Leaving Certificate (PSLC) will stay put although successful candidates will only get transcripts not certificates.
Making the proposal on this reform area, Maneb said was based on the fact that the certificate is no longer useful yet the cost of administering its examinations, K1.9 billion, was far much higher than the value of the paper.
In addition, by stopping printing of Standard Eight certificates, government will be saving K20 million in printing costs—savings that could be used toincentivise MSCE exam markers or rechanneled to other activities to improve service delivery.
There have been mixed reactions to the development but the Public Affairs Committee PAC hailed decision, saying it would save unnecessary costs in the sector but warned the executive to walk the talk by not acting in a way that would contradict the spirit of their own reforms.
The education sector will also see the Malawi Institute of Management (MIM) introduce a National School of Government while UNIMA will increase its infrastructure and diversify methods of delivery.
COMMUNICATION & INFORMATION
Reforms in this area will see the Malawi Posts Corporation (MPC) becoming a right sized organisation, with most of its operations tightened while others will be franchised.
As per the reforms, MPC will be franchising all rural post offices to boost its corporate image and allow it to compete with other emerging players in the industry.
The Malawi Broadcasting Corporation (MBC) will have a combined single newsroom for its television and radio by December 2015 just like the British Broadcasting Corporation (BBC) does it, the broadcaster will also introduce TV licensing as well as introduce Digital production facilities.
On its part, the Malawi Communication Regulatory Authority will see its reforms designating Blantyre as a Smart City and introduce e-waste management among other reforms.
ENERGY
Here ESCOM will finalise installation of pre-paid meters. Another reform that ESCOM will implement is the unbundling of the entity into one for power generation and another for power distribution, a reform that will also see other players joining the market subject to amendment of laws.
The reforms will also see the Malawi Energy Regulatory Authority MERA, among other things, review energy laws to provide for the creation of an independent petroleum importation coordinator.
AGRICULTURE
In the agriculture sector, the reforms secretariat, says discussions are underway on reforms that will revamp and reposition ADMARC but so far the National Food Reserve Agency NFRA has started implementing its reforms to become the country’s maize export coordinator, attraction of customers for storage facilities as well as increase visibility on fumigation services.
HOUSING AND INFRASTRUCTURAL DEVELOPMENT
Under its approved reforms, the Malawi Housing Corporation is set to amend its Act to respond to current times. MHC has also been tasked to have a strategic plan that will include housing as a priority sector in the MGDs.
The National Construction Industry Council NCIC has also been tasked to review its Act as well as to come with regional office so that increase visibility and stretch their work across the country.
TRADE AND INDUSTRY
The Malawi Investment and Trade Centre MITC will under the reforms construct a purpose built accommodation for the new One Stop Shop for Investment where all necessary offices for business establishment will be housed to speed up the process for investors.
MITC will also open offices in Tete, Mozambique.
On its part the Competition and Fair Trading Commission (CFTC) will be amending its Act eliminate existing gaps and provide for on-spot fines. The commission will also amend the Consumer Protection Act to harmonise it with the Competition and Fair Trading Act CFTA.
CFTA will also be constructing an office complex to improve service delivery and align sectoral laws to the CFTA.
CFTA Executive Director Charlotte Malonda says the reforms will address legal and administrative challenges that impacted on the smooth enforcement of competition and consumer protection laws.
“The reforms will go along away in removing overlaps and duplications between CFTC and other state agencies hence achieving efficiency savings and reducing the financial burden on state funding,” said Malonda.
SPORTS
In sports, the much talked about fraud during gate fee collection in stadia could be minimised as the Sports Council will introduce automated gate fee collection by December 2016.
Another reform area the council will undertake is the re-introduction of Physical Education in primary schools, a forgotten activity that used to produce talented young boys and girls in various disciplines.
According to the reforms department, the parastatals will implement the reforms within a year or two but monthly they will be sending reports plus meeting the Public Service Reforms Commission every quarter to discuss progress.
“We are taking the private sector approach to ensure that we monitor and evaluate progress so every three months we will be meeting the management team and the board,” said Vice President Chilima last Monday in Blantyre when he addressed the US Embassy Business Luncheon that attracted captains of the industry.
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Are these reforms or the usual best practices we ought to have adopted long ago considering the number of study visits our officials have undertaken over the years.
Kodi ali kumbuyoyo Seodi white ?
Ku water there is National Water Reources Authority imene anthu sakufuna itayamba kugwila ntchito coz they are protecting their interests. Maka Maweru
Cut the costs???? Are you stupit or you think we’re dumb? In other words yes you cut the cost which belongs to the poor so that you can buy expensive cars. How can you cut 20m and spent 3000,000,000 for a trip to un meeting??? This rubbish president is taking malawians for a ride one we will take him for a ride.
Please open this up to the general public to offer ideas on some issues. A phone line or means to bring these proposals should be communicated to the public. The Commission can not do it all on its own. People out there have ideas as well but they have no avenue of giving them out.
It sounds good just waiting for implementation.
What about those parastatals that are purely service providers such as research institutions, how are they going to turn around their institutions so that they can make money and cut sharply on relying on Treasury Funds?
The commission of the Public Reforms need to assist these kind of parastatals to ensure that they generate funds for operations rather than always relying on Government Treasury for funding.