Special Economic Zones progress worries PAC

Public Accounts Committee (PAC) of Parliament has queried the Ministry OF Trade and Industry on the slow progress in the establishment of Special Economic Zones (SEZs) and the use of about K2 billion on the project.

Through the Malawi Investment and Trade Centre (Mitc), the ministry is implementing several projects under SEZ development at Chigumula Industrial Park in Blantyre, Area 55 in Lilongwe and Dunduzu Industrial Park in Mzuzu.

But based on the Auditor General’s report of government’s accounts for the year ending March 31 2022, Mitc did not provide a report on how K1.8 billion was used on the projects while expenditures worth K52.7 million lacked supporting documents.

Speaking in an interview yesterday, PAC chairperson Mark Botomani said the committee was concerned with the slow progress on the issue, despite resources being provided.

He said: “Ministry of Trade and Mitc officials appeared before PAC, but the update they provided is not convincing on progress of the SEZ. The reasons given for the delay of the project are not good enough.

“We observed that compensations were paid out to those affected by the projects, particularly in Area 55 in Lilongwe, where over K2 billion was paid. But to date, there is nothing much to show which begs the committee to dig more.”

Botomani said there is need to show value for the money spent.

But in a response to the queries sent to Parliament, Secretary for Trade and Industry Chritina Zakeyu said they have now sent a status report to the Auditor General on how these funds were used.

She said: “I am pleased to report that the Chigumula Industrial Park project has made a significant progress as designs for access roads and waste water infrastructures and layout plans were done and submitted to Blantyre District Council for approval.

“The contracts for construction of access roads and waste water infrastructures have already been signed at K4 billion and K1.7 billion, respectively. Chigumula Industrial Park requires construction of a power station.”

Zakeyu said a plot for the power station was identified and that the Electricity Supply Corporation of Malawi (Escom) was negotiating with the African Development Bank (AfDB) for funding.

She said for the other parks, compensation and assessments were completed while cadastral, physical development, and layout plans are not yet done.

Said Zakeyu: “I have noted the observation by the Auditor General and I agree that payables amounting to K52 734 802.36 were reported in the financial statements of the Ministry of Industry as at 31st march 2022, but not supported with documentation.

“I would like to report that all the invoices have been traced and submitted to the Auditor General.”

SEZs are designated areas within a country with special economic regulations. When completed, they are expected to help foreign direct investors to set up companies with minimal challenges, according to the Mitc.