National Assembly Authorises Borrowing From OPEC, ADB For Mzimba Water Project

The National Assembly passed on Tuesday afternoon two loan bills for the Mzimba Integrated Urban Water and Sanitation Project.

The House authorises OPEC Fund for International Development Loan worth K8 billion whose payment plan is 20 years and within it is 5 year grace period with 1% of interest per year.

Later, the House was presented with another Loan Authorisation Bill amounting to K2.7 billion (US$ 2.6 Million) from African Development Bank for the same Project whose payment plan is 40 yeas with 10 years grace period.

Goodall 

Presenting the bill, Minister of Finance, Goodall Gondwe said the project will be implemented for a period of 4 years, to cost a total sum of US$22. 8 million and will be co-financed by OPEC, African Development Bank (ADB) and Government.

He said OPEC is providing 65% of the total cost, ADB will provide 22% while Government is expected to make 13% contribution.

While supporting the bill, Malawi Congress Party (MCP) shadow Minister of Finance, Alexander Kusamba Dzonzi expressed disappointment the borrowed money is not enough to completely end water problems for Mzimba district. 

Dzonzi said MCP would have loved to see government borrow US$55 Million which is actual amount that is required to Carter water challenges in Mzimba 

Expect More Job Cuts at MSB says MCP Shadow Finance Minister

Privatization has left bad memories in Malawians mind. Results in job cuts and sometimes closure of the company or if it manages to survive, it becomes less important to Malawians. So, Malawians anticipate the same from Malawi Savings Bank (MSB) sale. 

The Finance spokesperson for the Malawi’s main opposition party, Malawi Congress Party (MCP) says more harmful cost for selling Malawi Savings Bank (MSB) are imminent although FDH Holdings has promised hope having acquired the MSB two weeks ago.

Government signed the sale of its 75% shares to FDH Finance Holdings Limited to a tune of K5.4 billion and has set aside Capital subscription for Basil II of K3.20 billion and Investment in ICT to a tune of K0.90 billion which total the investment of K9.5 billion.

CEO for FDH Thomson Mpinganjira in an interview casted out fears of job cuts at MSB saying they want to do serious business of expanding the bank, a work that require more workers and more branches.

However, Finance spokesperson for MCP, Hon Alexander Kusamba Dzonzi says FDH holdings CEO promise is oratory and likened his remarks to promises made in previous privatized public institutions.

Hon Dzonzi stressed that MSB workers are at risk of being sacked and closure of many branches across the country is more likely.

“The Capitalists who have bought this bank have no remorse and don’t care about Malawians. They don’t care about 630 employees that are going to lose their jobs.” said Dzonzi as he name similar job cuts that happened at David White Head, Malawi Railways among.

“A lot of public institutions in this country have been privatized believing that that’s the way forward but what we see is nothing.” He claimed

“So the people who have bought this bank can make whatever promises but nobody is going to hold them responsible. And when they will start firing our sisters and brothers, nobody is going to ask why, when they start to close branches around this country, nobody including the Government will ask why.” Challenged Hon. Dzonzi

Hon Kusamba Dzonzi is a legislature who brought the private member’s motion on 26th February this year in parliament, asking the House to stop government from selling MSB pending Malawians views. Then the evening before the day the bank was sold a Report from Budget and Finance Committee of Parliament was presented and noted by the whole House. It made numerous recommendations emphasizing the recapitalization to meet some of the regulatory requirements including restriction of the sale of the bank. 

But the Legislature, expressed betrayal by Malawi Government for failing to obey all recommendations made by National Assembly. 

“I feel betrayed and I feel Malawians have been betrayed.” He said “I believe and respect all the people involved and I believe also that this country is governed by laws. If we start disobeying our own laws then how are you going to govern this country? Because when the house speaks that’s the people of Malawi speaking.”

“Now if the owners of the bank said don’t sale the bank, who so ever has sold this bank, then on whose behalf is he working? On whose interest is he trying to service? Who is he trying to please? He inquired then said “That definitely it is not Malawians.” 

Hon Alexander Dzonzi, who represents people from Dowa West added that government should have used other economic modules to recapitalize the bank.

He was even doubtful if the leaders who have been ruling the country since 1994 have patriotism.

Thomson Mpinganjira CEO FDH Financial Holdings who bought MSB he said they are planning to us MSB to expand their presence in the country and not shrink it. “No one will be fired” he said in the recent interview

“Out of 5.4 cash that we are going to pay the Government (this week), K300 million of that we are buying shares for the employees of the bank” assured Mpinganjira

Malawi Savings Bank sale has been attracting criticism among Malawians. 

MSB Sale; Get To Know Why Opposition MPs Says Big 'No'

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.

MSB Not For Sale

Parliament Block the Sale Until Committee Give a Go Ahead

The National Assembly has passed a motion restraining government from continuing with plans to sale Malawi Savings Bank (MSB) until determination is made by a relevant Committee if the sale of the bank is a necessary move.

On Thursday, Dowa West Parliamentarian Hon Dzonzi Kusamba brought in the House a motion during Private Members Motion where he moved that the House should resolve that the Sale of Malawi Savings Bank Limited be pended for the time being and that the matter be referred to the relevant Committee of Parliament (Budget Committee) for it to consult with stakeholders and report to the House.

When moving the motion, Dzonzi said the noble objectives of Post Office Savings Bank now Malawi Savings Bank Limited (MSB) established in 1910 by the colonial government are intact and yet to be achieved.

“But how can we achieve them if the Bank runs into private hands whose objective will be pure “profiteering”. Inquired hon. Kusamba who alleged the sale of Malawi Saving Bank Limited is propagated by few selfish individuals

Malawi government is planning to sale MSB for Conditionality of World Bank (WB) and International Monetary Fund (IMF), that Malawi Government should not be running businesses such as bank and that MSB Ltd does not meet the requirement of BASEL II instituted by the Reserve Bank of Malawi (a framework that has been put in place to assist banks manage financial risks well by maintaining a certain level of capital, currently a minimum capital for banks at an equivalent of US$5million) 

Dowa West Legislature has argued that WB and IMF condition is “fraudulent” and achaic type of reasoning which denies Government to ably discharge its duties of providing social-economic services to the rural communities which may appear unprofitable in the eyes of private hands. 

On BASEL II, he said MSB meets the minimum capital requirement but slightly falls short to meet the optimum capital requirement in order to meet the prescribed liquidity and capital adequacy ratios. He even indicated that Malawi can do without implementation of BASEL II just like neighboring economies that are stronger and better than Malawi’s economy.

“The question on the same is this “why was BASEL I jumped from implementation? Why is Reserve Bank of Malawi (RBM) forcing local banks to comply with BASEL II without an opportunity of orientation BASEL I would have offered.”

Hon. Kusamba also named “Accumulated Bad Debts” as major reasons that is eroding the bank’s Capital. With certainty he pointed “bulk of the bank’s non-performing loans” belong to Mulli Brothers Limited. 

He said the remedy is that Government should intervene by having Mulli Brothers Ltd repay the debt and that the Bank should take over the assets against which Mulli Brothers Limited loan was taken on.

 “It is an open secret, that the Mulli Brothers Ltd was granted the Loan in question when DPP was in power and now that DPP is in power again, the Government wants the Bank sold, Really?” queried the parliamentarian while concluding that there is no need for Malawians lose a National Treasure just because Government “completely lacks any political will” to mitigate on this questionable sale.

When debating the motion, Minister of Finance Goodall Gondwe clarified that it is not true that only Muli owe the bank as alleged by the member. He also promised an update of what is happening on that matter.

Goondwe irked members in the House when he mentioned that the matter of selling the bank at this time can only best be handled by lawyers and not National Assembly. “This is a legal matter it is not as easy as you think” 

Without delay, Salima South Parliamentarian hon. Uladi Mussa rise on point of order “The statement from the minister to say parliament is useless leaves a lot to be desired” he said, “Does the Minister know that parliament can impeach president? What is Malawi Savings Bank?”

Surprisingly, Leader of House Hon. Francis Kasaila also registered his support against sale of the bank “We in the business Committee of the house agreed that we need to bring this issue in the House so that the sale of the bank is done in transparent process.” He added that People from his Constituency are also against the sale of the bank.

Other parliamentarians including Salima North West, Jessie Kabwira and Salima Central, Felix Jumbe, in support of the motion as moved by Dowa West, said Malawi has been ranked one of the poorest countries because of such poor decisions which robe citizens “greatest treasure”.