Kapito against Escom privatisation: Hits at IMF and World Bank

The consumer and human rights activist, John Kapito has warned Millennium Challenge Corporation (MCC) not to use its technical and financial support on the restructuring of Electricity Supply Corporation of Malawi (Escom) as passport to influence and dictate the country’s policies.

Kapito:  No to let Escom go into private hands
Kapito: No to let Escom go into private hands

Kapito has also taken a swipe on the donor community especially the International Monetary Fund (IMF) and the World Bank for dictating the privatization of the country’s public institutions, and blamed the country’s leadership of lacking a clue on grants and loans donors provide to this country.

The consumer advocate made the omments at the time when government is planning to restructure the power market by unbundling Escom, with support from MCC, into two companies amid reports that the same government was considering privatizing strategic stake and management rights of the company.

The Ministry of Natural Resources, Energy and Mining with technical and financial support from Millennium Challenge Account Malawi, said was considering to unbundle ESCOM into two companies- one responsible for generation and the other for transmission and distribution of electricity.

“The fact that they have provided us with a grant or loan must not be a passport for MCC to use as a tool to influence and dictate our policies they can’t give us aid and write our laws but they must encourage us through partnerships to see how best we can navigate to have good energy reforms and policies they can’t use their aid to but our energy policy development programmes,” Kapito told Nyasa Times in an exclusive interview.

Kapito said it was unfortunate that donors have been pushing for the country to privatize its public institutions despite the fact that such initiative has not benefitted Malawians although many of government-owned institutions have been privatized over the years.

“Unfortunately today conditions to privatize or sell public institutions are dictated by those we borrow money from, IMF and World Bank, who do not really care at the future of any developing country until today they can’t answer whether we benefited from the privatisation of our key public industries,” said Kapito.

“Unfortunately our leaders seem clueless and they have no idea of what will be the negative effects of these grants and loans where the people that lend us money become the real armchair leaders”.

He then backed the idea of restructuring the power market by allowing new players to compete with Escom but warned government and the donor community from privatizing the utility company, arguing Malawi was not ready to privatise or sell some stakes in Escom but instead the company should undergo major reform and restructuring.

“We are not ready as country now to let Escom to be in private hands but as Malawians we are ready to restructure Escom so that it is independent from Government interference at the same time making sure that it continues to carry out its social corporate responsibilities to ensure that at least Malawi has attained 70 percent of electricity coverage to its people,’’ explained Kapito.

Kapito believes that Escom can be restructured without selling or privatizing any stakes, saying Malawi can still manage and control its full shares only if the company’s management and corporate structure is independent from Government control.

“If indeed Government needs to load off some of the functions it’s important to do a lot of studies where this has worked; unfortunately any of this has not been successful in any developing economies. The key answer is reform and restructures Escom for the good of Malawians and let us as Malawians own the process’’.

Ministry of Natural Resources, Energy and Mining in collaboration with Malawi Energy Regulatory Authority (Mera), Escom and MCCA-M, is expected to complete the restructuring of Escom is expected to be completed by 30th June 2016. The process will also bring in Independent Power Producers who will be given licenses to produce their own power and sell to the nation.

“It’s early too soon to let Escom to be left in private hands and it will be the worst disaster for Malawians and success for our partners that are pushing for the sale mark my words’’.

About 9 percent of Malawians have access to electricity.

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5 years ago

Anatigulitsa kale changosala ndi choti angopanga tsiku loti tonse tizikasesa ku ndata. Zimatiwawa maka mukamatiuza kuti tiphunzile pamene ma company mukugulitsa, ogulawo sangalore kuti ife tikhala pa mipando yabwino, amatipatsa ntchito yomasesa m’macompanymu. Tiphunziliranji pamene kuti tizagwira ntchito zabwino, timangileni sukulu zophunzitsa kuba basi, bola mukagulitsa mukumbuke kugula mankhwala nzipatala komanso mabuku ambiri agulidwe m’masukulu athu koma tisamve kuti mwagulira maunyolo ndi zibonga za apolice.
Anthu ogwira ntchito ku escom akachotsedwa ntchito azikakhala ku ndata. Bola lathu limazolowera kugulitsa ma company ngati tomato

Telling the Truth
Telling the Truth
5 years ago

I agree with all those who have criticised Kapito. Why is Kapito attacking IMF and World Bank? Mr Kapito please know that IMF and World Bank do not need Malawi. It is Malawi that needs these two institutions. Mr Kapito you mean you do not know that if these institutions gave Malawi funding without conditionalities these funds would be misused by the DPP govt? Have you already forgotten NACGATE? These parastatals are a drain of taxpayers money and badly abused by the ruling party. Look MBC is now just a mouthpiece of the DPP regime that is failing to transform… Read more »

Peter Mathanyula
5 years ago

Gulitsani Escom, Admarc, Water boards, Nyanja mumalizire kugulitsa dziko lonse la Malawi ndi anthu omwe.

5 years ago

Our country has been sold already to the foreigners. What do you expect from people who do not know the vision of the people who founded ESCOM? No wonder tafika pomgulitsa mafupa athu. Chifukwa chosowa zochita. Malawi walero, ndiwa mawa is very painful. Kapito has a point don’t criticize. He has been in the country. He knows our roots. Some of you only know branches where fruits are. Shame on you. Leave Kapito. He has a point. Iwe ukupanga makani ungagule ESCOM? Ndiwe olemera ngati amwenye akudzamaza Blantyre ndi Lilongwe?

5 years ago

Mr. Kapito needs to understand the words that he is saying. First, it is not in the interest of Government to run businesses. That is why we have a public sector and a private sector. Government’s role is to ensure that rules and regulations are followed that are at the benefit of the major populace. Second, if we Malawians keep on thinking that its donors who want us to change then we will remain poor for the rest of our lives and keep on celebrating independence on July 6 of being poor. Let’s face it, for 51 years our public… Read more »

5 years ago

usatinyase Kapito. iwe wemwe ukadya ndalama unena kuti yes. nkhope yonyasayo

Chiriko Phiro
5 years ago

People, let us be honest. What do we gain from the current status of ESCOM? Blackouts and inefficiencies. I mean ESCOM has been abused by politicians so much that it is almost bankrupt. It is not even answerable or accountable to the customers. Why do you still want this entity to be in Public Hands? By the way, we pay for the loans that ESCOM takes through our taxes yet we do not get much joy in its services. Even the tarriffs are not as low as some people would want us believe. Think of Malawi Telecoms. We have moved… Read more »

5 years ago

Mr Kapito got it wrong. IMF knows that Malawi government enjoys siphoning out money from Escom, Waterboard etc to finance political meetings instead of benefitting the population. This is an endeavor by IMF to close loose holes that are acting as conduits to siphone out resources from this poor nation.

5 years ago

its true govt should not give away escom because the benefit to the masses is little as experience has shown on past sale of other entities.

5 years ago

Mr Kapito, you told us that ESCOM power all day everyday was a blue lie. ESCOM then danced to your tune with towards power all day everyday.The change In the motto yielded no results in ESCOM s perfomance. Sir,Kapito you can’t be good in commenting all issues. Kenya and many African countries unbundled their power utilities and they are successful. Sir it pains us when these companies become milking cows for some political god fathers at the expense of poor Malawians. Are you happy when you see ESCOM trucks ferrying people to political party meetings? Sir Kapito, on this topic… Read more »

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