The financial performance of Malawi’s State-owned enterprises (SOEs) in the 2023/24 fiscal year has been mixed, with 12 of the 18 listed parastatals registering profits, while three posted losses.
Figures in the 2025 edition of the Ministry of Finance and Economic Affairs’ Annual Report indicate that some SOEs continue to grapple with operational inefficiencies, regulatory challenges, and external economic pressures. The report highlights that profitability has worsened in the 2023/24 financial year and at mid-year of 2024/25, particularly among trading SOEs.
Reads the report in part: “Most trading SOEs continued operating below cost recovery due to insufficient revenue generation to cover operating expenses.
“This is largely due to non-cost reflective tariffs and the impact of devaluation, necessitating government bailouts or recapitalisation.”
The 2023/24 financial year posed significant challenges for several SOEs, with notable underperformers including Blantyre Water Board (BWB), Central Region Water Board (CRWB) and Central Medical Stores Trust (CMST).
BWB reported a loss of K33.6 billion, worsening from K20.7 billion the previous year. The decline is mainly due to the non-implementation of a proposed 10 percent tariff hike and persistently high operational costs.
Similarly, CMST registered a loss of K8.6 billion, driven by increased stock write-offs and liquidity challenges.
On the other hand, some SOEs demonstrated remarkable improvements. Electricity Generation Company (Egenco) recorded a profit of K7.2 billion, a rise from K2.2 billion in the previous year, largely due to increased electricity generation and lower operational expenses.
Malawi Communications Regulatory Authority (Macra) also performed well, posting a surplus of K7.1 billion as at September 30 2024, attributed to growth in the telecom sector and higher spectrum usage fees.
A comparison with the previous fiscal year reveals a mixed picture. While entities like Egenco and Macra capitalised on favourable market conditions and operational efficiencies, others struggled to maintain financial stability.
For instance, the Pharmacy and Medicines Regulatory Authority saw a sharp decline, recording a loss of K471 million compared to a profit of K1.1 billion in 2022/23, mainly due to poor regulatory compliance and a failure to renew licences.
Meanwhile, the Tobacco Commission experienced a significant upswing, with profits increasing to K5.6 billion from K1 billion, driven by increased licensing fees and tobacco levies, reflecting a recovery in the tobacco sector. Similarly, the Technical, Entrepreneurial and Vocational Education and Training Authority saw profits soar from K1.4 billion to K12.9 billion, bolstered by higher apprenticeship enrolments.
Looking ahead, Egenco is expected to sustain its strong performance, with projected revenues of K7.2 billion while Macra also projects an upward trajectory of revenues at K13.3 billion.
However, BWB’s mid-year 2025 outlook remains bleak, with projected losses of K7.1 billion, underscoring the urgent need for tariff adjustments and operational reforms.
CMST is also expected to continue experiencing financial challenges, with a projected loss of K1.3 billion.
Presenting the national budget before Parliament last week, Minister of Finance and Economic Affairs Simplex Chithyola-Banda disclosed that SOEs have disbursed more than K13.5 billion in dividends to the government in the 2024/25 financial year.
