MDAs exposed

Except for a few outstanding ones, Malawi Government ministries, departments and agencies (MDAs) are fraught with weak performance that leads to inefficiency in the public sector, an Office of the President and Cabinet (OPC) assessment shows.

The 2022/23 End-of-Year MDAs Performance Assessment Report, which assessed 114 MDAs, shows Lilongwe Water Board (LWB) as a shining star with a score of 80.7 percent while the Ministry of Energy was the worst with a 22.17 percent score.

The assessment also shows that out of the 114 MDAs, only 70 submitted their annual reports, a breach of one of the corporate governance principles.

The report indicates that 78 percent of the assessed entities, which includes statutory corporations and governance entities, scored poor, 21 percent were rated good while only one percent had a ‘very good’ rating.

Reads the report in part: “Out of the 27 ministries and departments assessed, only three or 11 percent met their targets for the financial year and demonstrated good performance.”

Trailing LWB is Umodzi Holdings Limited with 76 percent and the Office of the Ombudsman at 71.07 percent.

Slightly above the Ministry of Energy is the Ministry of Defence at 36 percent and Department of Procurement and Supply Services at 36.20 percent.

According to the assessment, only 36 percent of the assessed MDAs made significant contributions towards Malawi 2063 First 10-Year Implementation Plan (MIP-1) objectives of equal to or above 60 percent.

Further reads the report: “What it means, therefore, is that when the government invests in the performance of ministries and or departments, the investment generates a ripple effect on the State-owned enterprises [SoEs] and vice-versa.

“Consequently, if the government can invest heavily in improving the management and leadership of these SOEs to start making profits and declaring dividends as Umodzi Holdings demonstrated.”

OPC spokesperson Robert Kalindiza yesterday declined to comment on the report, saying the office is yet to release it.

However, he did not dispute the contents of the document.

Comptroller of Statutory Corporations Peter Simbani yesterday said he was yet to see the report, as such, could not comment.

LWB chief executive officer Silli Mbewe said in an interview yesterday that if that is how the water utility has been assessed, then the recognition reflects their commitment to deliver reliable and high-quality water services while maintaining their strategic focus.

He said: “Our success is built on the hard work and dedication of our staff, who have been instrumental in driving our strategic initiatives forward even in the face of economic challenges.”

Mbewe said the water utility has focused on improving operational efficiency, enhancing customer service and implementing innovative solutions to improve service delivery.

Ministry of Energy Principal Secretary Engineer Alfonso Chikuni said they were not engaged to validate their data and were not represented at the assessment meeting in Salima.

He said: “This report is for 2022/23 when we had all those issues such as cyclones, Covid-19, fuel crisis and others. The bottom line is that they did not give us a chance to validate the data they used.”

Blantyre Water Board public relations officer Evelyn Khonje, whose institution was on position 59 with a score of 43.93 percent, admitted the utility’s underperformance in recent years.

She said to address the challenges, they have submitted a new turnaround strategy to government aimed at improving the board financially and making it a profit-making entity by 2027.

In a separate interview yesterday, corporate governance expert Jimmy Lipunga, a former chief executive officer of Public Private Partnership Commission, attributed the dismal performance of most MDAs to lack of clarity of mandate, adding that for a turnaround, there is need to institute strong leadership that operates on a commercial basis.

“What essentially is needed in public entities is the operation model. There should be a board of directors that could develop strategies designed to control operation costs, revenue optimisation and maintain corporate governance,” he said.

Malawi University of Science and Technology professor of accounting, finance and corporate strategy James Kamwachale Khomba said the fact that 39 percent of MDAs did not even submit their annual reports is not only a breach of corporate governance, but it shows lack of seriousness in the public sector.

He attributed this to lack of strong leadership that separates MDAs operation and government business and called for sanctions against controlling officers in those entities a.

On the other hand, Economics Association of Malawi acting president Bertha Bangara Chikadza said SOEs face similar challenges such that the problems of one entity affects another, especially those in utilities.

She said: “MDAs failing to clear or settle water or electricity bills usually result in perennial deficits for the SOEs. The affected parastatals usually cover up by borrowing.”

In its recommendation, the assessment which has exposed inefficiencies in the economy, including leakages, highlighted the need for government to address what triggers public sector performance.

Reads the report: “A leaking and bleeding economy is like a bucket of water with holes that do not keep water. The results show that increased public expenditure of K2.4 trillion during the year under review did not lead to improved service delivery to the public as the results on public service delivery show.”

The assessment suggests that to fix the economy, government needs to close the bleeding veins in the system, which have manifested in increased debt and runaway inflation currently at 33.7 percent.

On the other hand, public debt currently stands at K15.17 trillion or 81 percent of the nation’s gross domestic product, according to a Ministry of Finance and Economic Affairs quarterly debt bulletin released last month.

The MDAs were being assessed based on accomplishment of mandates through planned interventions, contribution towards achievement of Malawi 2063 MIP-1 objective, contribution towards Sustainable Development Goals, value of money and public perception.