The Centre for Social Economic Concern (CfSC) has called on the Malawi government to attach measurable performance conditions to financial support for State-owned Enterprises (SoEs). This move aims to ensure taxpayers receive value from the billions of kwacha spent sustaining financially weak public firms. According to CfSC economic governance officer Agness Nyirongo, support for SoEs providing essential public services can be justified, but the government must demonstrate what taxpayers receive in return.
The Centre for Social Economic Concern's call follows findings in the World Bank's 23rd Malawi Economic Monitor (MEM), which identifies financially weak SoEs as a significant fiscal risk. The report estimates that quasi-fiscal activities undertaken by SoEs generate implicit subsidies equivalent to about two percent of gross domestic product (GDP) annually. A recent analysis of the government's 2025 Consolidated SoE Report shows commercial entities received about K292.17 billion in government grants between 2022 and 2025.
Agness Nyirongo emphasized that continued financial support should be tied to performance agreements containing measurable targets on financial management, debt reduction, revenue collection, service reliability, operational efficiency, and customer satisfaction. She warned that simply injecting more money into struggling enterprises without addressing underlying weaknesses risks creating a cycle in which taxpayers repeatedly finance the same problems.
Nyirongo cautioned against applying a blanket approach to SoEs, as their financial circumstances and public-service responsibilities differ. The government's SoE report shows Electricity Supply Corporation of Malawi (Escom) moved from a K65.3 billion loss in 2024 to a reported K4.8 billion profit in 2025, while Blantyre Water Board's loss narrowed from K37.8 billion to K10.2 billion.
African Institute for Development Policy executive director Eliya Zulu also weighed in on the issue, cautioning against assessing SoEs solely on commercial profitability. He noted that some SoEs exist to provide essential services that the private sector may not provide affordably, and they also have a social component. The World Bank recommends separating such public-service obligations from commercial operations and explicitly financing them through the national budget.
Nyirongo backed the World Bank's approach, saying that where the government requires an enterprise to provide services below cost for social reasons, the associated subsidy should be transparently identified and budgeted. She emphasized that reforms should ultimately result in fewer bailouts, improved services, and less pressure on public finances.
The Centre for Social Economic Concern's recommendations aim to ensure that taxpayers receive value from the financial support provided to SoEs. Nyirongo stated that for taxpayers, the measure should be whether every kwacha transferred to an SoE is accompanied by greater transparency, stronger performance, and a credible path towards sustainability.
Key points
- Centre for Social Economic Concern urges Malawi government to attach measurable performance conditions to financial support for State-owned Enterprises.
- Financial support for SoEs should be tied to performance agreements with measurable targets.
- Reforms should result in fewer bailouts, improved services, and less pressure on public finances.
