Minister urges state owned enterprises to implement austerity measures

Minister of Finance and Economic Affairs, Simplex Chithyola Banda, has urged state-owned enterprises (SOEs) to enact significant cuts in expenditures in a bid to align with government imposed austerity measures.

Addressing stakeholders during the signing ceremony of the 2024/2025 Shareholders Letters of Expectations at the Bingu International Convention Centre in Lilongwe on Thursday, Banda emphasised the necessity for SOEs to adhere to the prescribed austerity measures outlined by the government.

“Government’s directives on austerity demands a collective effort to curtail spending. It is imperative that SOEs lead by example thereby reducing expenditure and fostering national savings,” stated Banda.

The Minister underscored the pivotal role played by SOEs in delivering essential services to citizens and emphasised the need for them to improve operational efficiencies while adhering to mandated service provisions.

“As key providers of essential services, SOEs play a critical role in the socio-economic landscape. Today’s ceremony marks a commitment from these enterprises to fulfil their mandates while simultaneously enhancing their operational performances,” he remarked.

Banda reiterated government’s unwavering commitment to fiscal discipline and called upon all stakeholders to collectively work towards realising economic stability and growth in Malawi.

Expressing concerns over the financial health of many SOEs, Secretary to the Treasury, Dr Betchani Tchereni, lamented excessive expenditures despite several entities operating at a loss.

Tchereni urged SOEs to strive for profitability and contribute dividends to government coffers.

“The prevailing financial state of numerous SOEs necessitates urgent action towards achieving profitability. It is imperative for these entities to redouble their efforts, enhance operational efficiencies and ultimately contribute dividends to the government,” he said.

Chairperson for Lilongwe Water Board (LWB), Paramount Chief M’mbelwa, announced notable profits and dividends paid to the government.

“LWB is proud to report a profit of K2.4 billion, underscoring our commitment to financial prudence. Furthermore, we have disbursed dividends totalling K200 million to treasury, showcasing our dedication and compliance to national development,” he said.