Human Rights Defenders Coalition (HRDC) has expressed disappointment with allegations of fraud and mismanagement at state-funded Agricultural Development and Marketing Corporation (ADMARC) and Electricity Generating Company (EGENCO) of Malawi.

HRDC National Chairperson Gift Trapence, in a statement issued on Tuesday, said revelations of abuse of public resources at the parastatal organizations is a clear demonstration by boards of the said institutions have failed to perform their oversight functions effectively.

“Recent reports of alleged multi-billion Kwacha frauds at EGENCO and ADMARC underscore a systemic issue of gross negligence and incompetence that cannot be ignored. Over the past two years, EGENCO and ADMARC have become synonymous with financial impropriety and operational dysfunction,” reads the statement Trapence has co-signed with regional leaders of the coalition.

Trapence quotes a 2022 audit, which disclosed that the state produce trader incurred losses amounting to K330 million due to alleged fraud and abuse, orchestrated by its employees, including managers and directors.

He says this is a clear indication of a breakdown in internal controls and a lack of accountability at all levels of the organization.

Trapence and the coalition’s leadership further reveals that the situation is worse at EGENCO, with the company losing K6.7 billion due to an alleged misprocurement mess between January 2017 and March 2022.

“This alleged scandal involves unissued items in stock, unauthorized requisitions, and rampant single sourcing of materials and services, bypassing the required national competitive bidding process. These actions not only contravene procurement laws but also demonstrate a blatant disregard for ethical governance and fiduciary responsibility. These instances are not isolated; they represent a broader pattern of maladministration and financial misconduct across state institutions,” continues to the statement.

Trapence adds that HRDC firmly believes that delays by the boards in acting on audit queries perpetuate the abuse of public funds, as those responsible are emboldened by the lack of immediate consequences. The oversight on implementing audit recommendations is grossly inadequate, rendering the boards of these parastatals ceremonial entities that waste taxpayers’ money without adding any value.

“We are dismayed by the failure of these boards to uphold their mandate to ensure transparency, accountability, and prudent management of public resources. The boards are evidently sleeping on the job, and it is imperative that they be held accountable for their inaction. Those who have demonstrated an inability to perform their duties should be fired outright. This is not merely a call for accountability but a demand for justice on behalf of the Malawian people, whose trust has repeatedly been betrayed.

“We are also disheartened by the decision to give ADMARC K40 billion to purchase maize when the loopholes that were revealed the audit report have not been sealed. We believe the system is still prone to abuse and there is need for corrective measures before any financial injection into the institution. Furthermore, it is troubling that the Secretary to the President, who presides over these institutions as a member of all parastatal boards, has allowed such gross mismanagement to persist under her watch. This rot is happening right under her nose, and it is high time she takes responsibility and initiates corrective measures. Her inaction thus far is a disservice to the nation, and she should be the first to bite the bullet and set an example of accountability,” emphasizes Trapence.

He reiterates the coalition’s call for the government to appoint qualified professionals to parastatal boards, recommending that these appointments must be based on merit, with a clear focus on ensuring that public funds are not only well spent but also meticulously accounted for.

Trapence says the boards must be empowered and committed to holding the executive accountable for their use of public resources.

“A functional and diligent board is essential to preventing further abuses and restoring public confidence in these institutions. When the boards fail to execute this function, they ought to be relieved of their duties to allow other capable professionals to undertake this role. In conclusion, the HRDC demands immediate and decisive action to address the deficiencies in the oversight and governance of parastatals. We call for comprehensive audits, swift implementation of audit recommendations, and the appointment of competent professionals to the boards. The HRDC also demands that the government dismiss the boards of EGENCO and ADMARC for failing to execute their duties. It is only through such measures that we can begin to rectify the systemic issues plaguing our state institutions and safeguard the interests of the Malawian people.

“The HRDC stands resolute in our mission to defend the rights and resources of Malawians, and we will continue to hold those in power accountable for their actions. The time for change is now, and we urge all stakeholders to join us in this critical endeavor,” thus concludes the statement.