Experts in governance have asked the Malawi Government to quickly reconstitute the boards of parastatals and State-owned enterprises (SOEs) dissolved on Tuesday to avoid disruption of operations.
In general, the pundits and public sector sources said while there could be no serious legal implications following the dissolution of all 77 parastatal and SOEs, any delay in appointing new ones could affect the organisations’ performance.
The Office of President and Cabinet (OPC) announced on Tuesday that the boards were dissolved with immediate effect.
The dissolution came three days after the formal change of political guard from Malawi Congress Party to Democratic Progressive Party (DPP) following the latter’s presidential candidate Peter Mutharika’s triumph in the September 16 General Election.
Political Science Association of Malawi spokesperson Mavuto Bamusi said although it is standard practice to dissolve boards during political transitions, there are also disadvantages if it takes long to replace them.
He said the absence of boards may create room for abuse by the parastatals and SOEs’ executives.
“There are pros and cons to this action. While the boards remain dissolved, it may give too much power to the executive to make decisions and take actions that were supposed to be referred to the board,” said Bamusi.
He al so advi sed the appoi n t i ng aut hor i t y, Mutharika, to hire board members who have expertise and not mere political loyalists.
Similarly, governance expert George Chaima said the boards play an important role because they offer strategic direction.
He added that, usually, crucial decisions cannot be made without referring them to the board.
“Any f u r t h e r d e l ay may negatively affect the parastatals,” Chaima said in a telephone interview.
On potential legal pitfalls from the boards’ dissolution, social scientist, researcher and governance expert Professor Wiseman Chijere Chirwa said the situation would depend on individual parastatal boards’ operational terms.
In announcing the dissolution on Tuesday, OPC Principal Secretary for administration Maxwell Tsitsi said all matters requiring boards should be directed to OPC through the Department of Statutory Corporations.
