Ecama hails Treasury move to migrate SOEs accounts
The Economics Association of Malawi (Ecama) says the transferring of 22 accounts of parastatals to Reserve Bank of Malawi (RBM) and open a Treasury Single Account (TSA) has the potential to improve performance in these entities.
Ecama acting president Bertha Bangara Chikadza was yesterday reacting to the announcement by Minister of Finance and Economic Affairs Simplex Chithyola that Treasury has migrated the accounts to RBM and will transfer the remaining trading State-Owned Enterprises (SOEs) and subvented organisations in the 2024/25 financial year.
In an interview, she said the move coupled with the performance assessments at SOEs and review of public finance management (processes and procedures will help to improve excellence in parastatals.
Bangara-Chikadza, an economics lecturer at the Malawi University of Science and Technology in Thyolo, said the transition, if implemented correctly, could reverse the trend, considering that the government will not be borrowing from the bank’s funds.
“The transition makes banks do their real work of supporting the private sector in terms of investments rather than making quick money through lending to the government.”
Economic statistician Alick Nyasulu said in an interview yesterday that the move will improve the efficiency of the government’s operations because it will “cut the middle-man and make it easy to control, monitor and reduce potentially expensive commercial loans”.
He, however, cautioned that the measures will not work if the government does not show the political will to address political patronage in SOEs and abuse.
In the budget statement, Chithyola Banda said the arrangement will improve dividends and surplus remittances, thereby widening the non-tax revenue base.
But Bankers Association of Malawi chief executive officer Lyness Nkungula earlier said the move could worsen the liquidity positions at commercial banks.
