Malawi Government has stiffened its head to sell the Malawi Savings Bank (MSB). There are so many backing to that; from legal aspect of the process of the selling of this national treasure which it has been argued that no one can halt the process, lack of enough capital to sustain the running of this institution and many other reasons the Malawi government is trying to justify on the sale.
A lot of human rights activists, economists and various experts in various fields have in the name of patriotism argued much on this ongoing topic of the sale of MSB. Some have strongly spoken against the sale while others supporting the government move to go ahead with sale.
This coming Friday, 15th of May 2015, some concerned Malawians are going to protest against the sale of MSB and there is a prepared petition which is expected to be presented to the Speaker of the Malawi National Assembly.
I would like to pick out some of the Members of Parliament who I talked to recently pertaining to the sale of the bank. These MP's were the very first people's representatives who stood against the sale of MSB and are proposing that people should have a say on this decision rather than executive arm of government make a unanimous decision to sell the bank.
Honorable Alexander Kusamba Dzonzi member for Dowa West Constituency and is one of the Spokesperson for Malawi Congress Party (MCP) on Finance issues in the National Assembly he says "Malawi Savings Bank is being sold, but why is it that the executive is not involving 193 MPs who are the peoples representatives? That is our bank and the shareholder is government, so how is the executive making these decisions?"
Dzonzi reminded of how privatization ripped off Malawi's treasure including SUCOMA (Sugar Corporation of Malawi), MDC and David White Head clothing company. He said such companies were actually sold in the similar manner believing that privatizing them would benefit the country.
"The approach is the same" he reminded, "So we are saying that some of the politicians who refuse to think like Malawians have an agenda to impoverish Malawi and kill our economy. But we would love as MCP to redeem MSB, we want to listen particularly what are problems. If there are some ways even if it means borrowing in order to redeem that bank we would be happy."
He mentioned countries like China as one of the countries in the world which has its own national bank. He said people including big corporations keep their money in such banks and that also help the country to manage forex.
"We are lying, the economic policies being followed today is wrong and is a textbook one. We need real economics" said Hon Dzonzi
Kusamba on 26th April 2015 moved a motion in the National Assembly and was supported from both side of the house that the process of selling the bank be paused now pending a parliamentary committee on Budget and Finance to scrutinize the matter first and make its recommendations.
Kusamba Dzonzi says he together with people from his constituency are in disagreement with some three reasons that appear to have forced government to sell the bank.
"IMF and World Bank actually has advised Malawi government not to be engaged in banking business. That is not right and it is a fraudulent type of thinking considering that government has a lot of duty particularly providing social services. Now we are talking about MSB which its services and branches are found in the rural areas. This is people's bank and nobody and not even the executive has the power to decide unilaterally without actually bringing the matter to the house (Parliament) for vetting that they should sell it." He said
"Another argument is that there is Basel II which was instituted by RBM. But even in the event that RBM wants MSB to comply with Basel II, am saying that MSB actually meets the minimum requirement of Basel II what it doesn't meet is optimum capital requirement and is actually the amount of K4 billion. If government intervenes forcing Mulli Brothers who actually owe this bank K6 billion then the bank will have enough money. So there is no reason to sell the bank."
"Furthermore, the other reason that government wants to sell the bank is that it does not want Mulli to pay the loan because Mulli got the loan with guarantee from government so there is no collateral that the bank can pounce on and it does not even know what to do to redeem this bad debt. This is not on, Mulli has to pay the loan because Mulli is still here doing his businesses and possibly has more contracts in the government. Government should therefore recoup that money and redeem the bank." Said the Dowa West MP
He added "The rumor has it all that they want to write-off the bad debt of K6 million that Mulli owe this bank. Now, when they write off that bad debt they reduce the strength of the balance sheet of the bank meaning that its value will diminish. So they want to use that plea and sell the bank at a song so we are saying no! Let Mulli brothers pay and there are a lot of options we can take as a nation."
Dzonzi also mentioned that there is a big problem in terms of financial policy issues in the country, "You have seen this issue of currency swap which resulted in the management of Kwacha. It is artificial but you know who has failed? It is Reserve Bank of Malawi (RBM). The RBM the custodians or the managers of the monetary policy have failed to mitigate the dwindling Kwacha. They have asked the fiscal policy or the government to intervene yet somewhere you hear that RBM wants to be independent. So you see that it is wrong and we are following the economic policy or system whereby we believe that the monetary policy should take charge of fiscal policy, this is wrong. Fiscal policy should always be in charge of monetary policy because whatever the monetary policy can be done by fiscal policy unless the economists in government have gone for a nap"
Ralph Pachalo Jooma member for Mangochi Monkey Bay, Peoples Party (PP) spokesperson on Finance issues in National Assembly is also against the sale of the bank, he said "There is nothing wrong to sell a bank, but what is wrong is to make a preannouncement to the public because; bank work with the public, bank has got customers who have got people with their deposits in that bank, and others with loans owe that bank. So you don't want to disturb all these people because you intend to sell this bank. Banks are sold secretly you don't have to preannounce to everyone for people to know that you are going to sell a bank."
He then said "For me I think it's a good idea that we should look at restructuring and not selling MSB because it is the only bank that you can find in any corner of the country. So you don't sell such a bank because it's like selling the ADMARC which is also found in every corner of the country."
Hon Jooma said "We can't sell MSB, we are totally in disagreement with that and the preannouncement of the selling is also not good. What we should think the government should do is to restructure perhaps obtain more capital from other investors who will not hold over 50% of shares but they will put enough money to make sure that the bank is up and running."
Equally against the sale of the Bank is Hon Rashid John Msusa Pemba for Mangochi Masongola spokesperson for United Democratic Front (UDF) on finance matters in the National Assembly "Am a bit worried frankly, if we look at the performance in the past six months we have done well in taxation. Taxation means there is business on the ground but we haven't done well on the non-taxable issues which means we need to improve in our corporate finance. So we need to improve in the companies that belong to Malawi by actually looking at the means and see where we actually fail to manage."
"The selling is not a solution" he said and suggested "We have to look into the issue as to why we are not performing in such kind of companies."
Hon Pemba explained that if Malawi feel that the only way is to do away with the bank then it is wrong. He said government has to look at various means of redeeming the bank like investing more into tourism industry and invite a lot of people to have more shares in the sector in for it to generate the needed funds."
"As the country we need to have a bank, that we have got no choice." He said and went on "I think the sale of the bank is totally not acceptable. We need to sit-down and think and involve the people from all corners to get the right advice. The way we should do things in Malawi is we should make sure that we consult many people, put inputs regardless of political affiliation because this is our nation."
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