Escom should first clean up its act

The message is very clear. Let the Electricity Supply Corporation of Malawi (Escom) which is by law seeking consumers’ views on raising the tariff in the next four years by 68 percent must first clean up its act. Agreed, Escom cannot survive without running like a business. But it is messed up by its political masters. It is their cash cow. Let us not mince words here. We should leave mincing to the grinder.

There is no dispute that Escom needs to survive. Maybe not just survive but also grow. But one of the reasons the organisation is failing to grow is because it is choked with corruption.

Electricity penetration in the country is a paltry 9.8 percent. One of the lowest in the Southern African Development Community (Sadc) on electricity penetration. Yet there are thousands of applicants who have been waiting for years without being connected to the national electricity grid. If it increased its consumer base, its revenue streams and profitability would also grow. Unfortunately, with the current mismanagement, fraud and corruption which are endemic at the organisation, it is not able to do so.

Malawi has slipped on the Transparency International (TI) Corruption Index from 43 during the last rating to 31 last year. Talking about corruption in general, the vice is one of the country’s major obstacles blocking its road to prosperity (Greg Toulmin—Weekend Nation, August, 2018). “Corruption in a small and tight economy like Malawi retards development. There are too many stories and indications of corruption in procurement in public and procurements and processes. Corruption is basically stealing from the poor. It is too easy to find examples of gaps being too wide and between what is being adopted and what is being done. That decreases confidence, and is the reason Malawi is not attracting investors (Outgoing Norwegian Ambassador to Malawi Haugen, The Nation August, 2018).”

Within the region, Malawi’s per capita foreign direct investment (FDI) in dollars terms is in single digits compared to $20 for the Sadc average (Lederman, et al 2010).

Escom’s former finance director Bettie Mahuka resigned from her job in 2017 after refusing to authorize a dubious payment worth billions of kwacha. The firm’s immediate past director general Evelyn Mwapasa was unceremoniously removed from the organisation for a similar reason (Vice-President Saulos Chilima, July 2018). Escom’s board chairman Thomson Mpinganjira, a few weeks after being appointed to the position bemoaned the reckless procurements of equipment worth billions of kwacha which may not be used in the next 10 years, if at all. A 2016/17 audit report revealed that K9.8 billion could not be accounted for at Escom, (The Nation, August, 2018). Some 3.8 million liters of diesel (or 76 fuel tankers of 50 000 litres each) meant to power the gensets leased from Aggreko disappeared into thin air during the past few months. The only suspected culprits so far who have been arrested are security guards, drivers and stores clerks. Not the suppliers who were contracted to provide the fuel. That is how stinking the rot is at Escom.

Escom, like all other government-owned companies is supposed to be remitting dividends to the shareholders—we, Malawians, through the Malawi Government. Escom is supposed to be doing this in the same way it asks government to bail it out when it cannot balance its books. But Escom posted losses in billions of Kwacha in 2016/17; and so you don’t expect the corporation to remit anything to the shareholder who would then have decided how much to plough back into the entity for improved power and sustained power distribution. This happened at a time the entity had procured useless equipment worth billions of kwacha.

So, Mera should not just be moving around seeking consumers’ views on the proposed tariff hike in the next four years to fulfill a legal requirement.  It should heed the advice from the consumers. This includes ensuring that Escom’s political masters get their long and dirty fingers out of Escom’s cash pot.

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