Finance Minister takes a swipe at non performing SOEs

Lilongwe, April 2, Mana: Minister of Finance and Economic Affairs, Simplex Chithyola Banda, has taken a swipe at some State-Owned Enterprises (SOEs) for performing below expectation and has since assigned the Secretary to Treasury to facilitate performance assessment to see how best to position them.

The Minister made the sentiments Wednesday at the Bingu International Convention centre (BICC) in Lilongwe when presiding over the signing ceremony of shareholder’s Letters of Expectations.

Banda noted that there are some SOEs that are performing below expectation hence the need for initiative to allow them sign letters of expectations for them to work hard.

“The signing letters of expectations will help SOEs to be on their toes in terms of performance and be able to generate revenue. This is a framework under which the ministry monitors their action, work and performance.

“This is the second time. Last year we did the same and some SOEs were able to pay government some dividends and remittances but still some are still struggling. This is a wake up call for SOEs to work extra hard and be able to share experiences for improved performance,” said Banda.

He said some SOEs are still a burden for implementation of the national budget because they still come forward for bail outs, an indication that they are not performing well.

He said the state is doing assessment through a monitoring framework to appreciate SOEs challenges and environment to ensure they are working within their plans.

“Some of the challenges that we have seen are that some SOEs are too ambitious, and they operate outside their approved budget.

“These are some of the things that we needed to share with them such as compliance to the approved budget and to live according to their Key Performance Indicators that they shared in their letters of expectations and these will be used to measure their performance,” he said.

Chief Executive Officer for National Economic Empowerment Fund (NEEF), named as one of the best performing SOE, Humphrey Mdyetseni said the letters of expectations are a pathway on how to travel in the next 12 months.

“What is key is that in the key performance indicators are deliverables that are expected of us as SOEs to deliver to Malawians for better service delivery and at the end of the day, make an impact in the lives of Malawians.

“It's significant because the resources we receive from government are not just there to be spent for purposes of spending, but to spend them with the aim of transforming lives of Malawians,” said Mdyetseni.

Comptroller of Statutory Corporations, Peter Simbani, said he is going to monitor SOEs to ensure they achieve results.

“The state corporations or state enterprises have signed these letters of expectation which are going to outline what government expects from each one of them in terms of the targets, on revenues, on expenditures, but also on the dividend or surplus which they are supposed to give to government.

“So, as comptroller corporations, I will be there to monitor implementation of the KPIs that are going to be developed so that they are assessed using that and my office is there to monitor the implementation to make sure that they achieve whatever they have agreed with the Treasury,” said Simbani.