Mutharika Makes Another Promise On ATI Bill

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President Peter Mutharika continues to make promise of taking Access to Information Bill to National Assembly but this time around says this will happen "at some point" in this 46th Session.

Since he was elected the president of Malawi, Peter Mutharika has made number of promises to enact the ATI bill. Most recent similar pronouncement was made in Salima district where he said the bill was finalised and ready for tabling during the First Meeting of 46th Session of National Assembly. However, Week before National Assembly Meeting his minister of Information, began to issue statements which contradicts president promise and the bill never went to the Assembly.

When Mutharika was speaking to Journalist at Kamuzu Palace in Lilongwe on Monday afternoon he said his Government is not fighting against the bill and will not “take deadlines” from anybody of when to have the bill enacted 

Again, Mutharika made usual promise when asked of the progress of resolving inconsistencies which Government said was main impediment to take the bill during just ended National Assembly meeting.

But this time around using a word ‘at some point’ for more than twice, he said the bill will be passed in this 46th Session of National Assembly but after Cabinet Committee on Legal matters addresses all inconsistencies.

He mentioned that there are number of provisions in the bill which his administration finds to be inconsistence.

“There are number of issues in the Bill. We have for example provision in the Bill which says that the bill will cover any information that happen before the bill was enacted.” indicates Mutharika

While stating that the provision is against principle of common law (called ex post facto law), which prohibits application of a legislation to things happened before it was adopted, maintained that he wants law take effect on the matters happening from the day he assent the bill.

“There is another one” he added “It says that, in future no parliament can ever repeal this law… But parliament is sovereign it can pass any law or repeal any law.” Said Mutharika

He went on “We are passing the bill not to please anybody, we are passing the bill in our interest its good that people should know in a democracy, how decision are made and we hope that all these requests will be made in responsible manner and that those information will be respected.” Said Mutharika and repeatedly said “We will pass the bill at some point.”

Mutharika was speaking to Journalist at Kamuzu Palace in Lilongwe on Monday evening following his return on December 6 from Malta, UK and South Africa where he attended Summit and held number of bilateral talks.

Minister of Foreign Affairs George Chaponda indicated in the Communique that President Mutharika in his engagements with UK government officials and legislatures spoke and got promise on budgetary aid resumption to Malawi.

Apparently, Malawi is required to meet number of conditions including passing Access to Information Bill for European Union (EU) (whose membership includes UK Government) and World Bank to disburse their promised budgetary aid.

Malawi Minister of Finance, Goodall Gondwe, delivered in the National Assembly a statement on 25th November 2015 on Economic status of the country wherein he indicated that donors like World Bank and EU will continue to withhold promised budgetary support until Malawi brings to Parliament the bill and meet other 19 conditions. 

But Mutharika on Monday said there is no need to put some conditions because “we are going” to pass the ATI Bill.

“It is in our manifesto, we are the first people to say in Manifesto that we are going to have Access to Information.” He said

How Crucial Is The Bill To Attract Budgetary Support?

EU and World Bank promised Malawi to resume their budgetary support.

However the Minister of Finance Goodall Gondwe admitted in the National Assembly on 25th November 2015 that on top of Public Finance Reform Management Programme, immediate IMF conditionality the two institutions have also added their own conditionality that Malawi needs to meet before their budgetary support is disbursed.

Goodall 

“A large number of conditionality has been agreed which we will have to satisfy before they can disburse the budgetary support. These two institutions require that we should have presented in this Parliament, Access to Information Bill (ATI) as well as implement reforms relating to wage administration that will expunge ghost workers in our wage bill.” Said in his statement in November National Assembly meeting

He added that the two institutions also demands that Malawi need completely reform the FISP which they essentially support so that more than half of the subsidized fertilizers is sold by the private sector instead of Smallholder Farmer Fertilizer Revolving Fund of Malawi and ADMARC. He noted that in total there are more than 20 conditions that Malawi has to meet before the funds are disbursed.

“We are working on these now and we hope that we can satisfy them by the end of March 2016 so that the aid disbursement can take place during the fourth quarter of this fiscal year.” Said Goodall

He also mentioned that Malawi has reactivated IMF Programmes because they are helpful because they reinforce prudent fiscal management and require rigorous economic and financial discipline in Government and reserve Bank.

He therefore said Malawi is set to take number of measures to effect the required balancing of resource with expenditure so as to reduce inflationary pressures. He said this follows IMF conclusion that its programmes have been off track.

“We expect to bring the programme on track as the next IMF staff visit to Malawi (February 2016) when the data for the first half of financial year (July to December 2015) will be examined. 

He therefore highlighted that the conclusion of IMF that Malawi is back on track will be valuable to attract donors to review their stand on their support to Malawi.

“Certainly we know that regardless of the conditionality they have given us the first conditionality that EU and World Bank have given us to resume their pledged budgetary support is the observance of IMF programme.” he said 

Gondwe further added that the IMF programe could also be advertised to the private sector internationally that prudent finance management is resumed in Malawi 

“It is critical in regenerating confidence in the economy” he added

Several donor nations in 2013 suspended budgetary aid to Malawi following public money looting scandal known as Cashgate. The latest to announce the delay of funding were donors under the Common Approach to Budget Support (CABS).

Through the suspension, Malawi lost almost 40% of its budgetary assistance.

National Assembly Passes Loan Bill For International Airport Upgrade

National Assembly on monday authorizes government to borrow K14 billion funds from European Investment Bank for the purpose of upgrading Chileka and Kamuzu International Airports to meet international standards on safety and security.

The House passed the bill after contributing and adopting the report on the bill from the Parliamentary Committee of Transport and Public Infrastructure.

The money from the European Investment Bank Loan Authorization Bill is to be used for the Project of upgrade of Aviation Safety and Security Equipment at Kamuzu and Chileka International Airports.

The bill passed with several amendments to the memorandum of the bill as proposed by the Parliamentary Committee of Transport and Public Infrastructure after scrutiny of the bill.

The amendments includes change of the title of the bill to read phase 1, change of Closed Circuit Television CCTV Link Tower to read Automated and Integrated Closed Circuit Television, wording of Wind Measuring Unit to Weather Measuring Unit and Radio to Radiosond.

Minister of Transport Francis Kasaila said the passing of the bill was timely because any delay will prevent flights into or out of Malawi because of airports safety and security conditions.

He promised that Government is now going to work flat-out making sure that within shortest time possible it procures equipments to improve on the concerns by International Civil Aviations Authority.

Throughout the deliberations, legislatures from Northern region emphasized the need to as well rehabilitate, Mzuzu airport which is hub for the north.

However, responding on calls for the need to rehabilitate Mzuzu Airport the Minister of Finance Goodall Gondwe said Government is waiting people from Mzuzu city to make a unison decision of the land where the airport could be relocated.

Gondwe said the main impediment for Government to commence consteuction of new airport in Mzuzu is because there are deffering views on where the airport be relocated to "Some wants the airport be relocated to Chiweta, someone says another place.

But it is up to us the people from the northern region to make a decision and then we can inform the ministry.” He said 

“Any thinking person will not oppose that, and as a citizen of Mzuzu I would like to see a very good international airport in Mzuzu and we will put in plans, as government we are very actively seeking funds to construct that airport. We have started with rehabilitation of Chileka and Kamuzu the next one is Mzuzu airport." He said but as to when that money is to be available, Gondwe said it is not known now because Government has to solicit funds.

Minister of Transport Francis Kasaila in an interview concurred with the Finance minister on this call saying Government would like to let people of Mzuzu to tell their choice of land for the Airport.

"The minister of finance made it clear, it is upon the people on the ground to decide the piece of the land that they can offer for the construction of the airport.

Few years ago Government spend to a tune of K250 million, to pay for the land and paid for compensation so that we relocate the airport to a safer place because where it is now is not a good place, you can easily have an accident. 

But after paying for that land and after having compensate people, the people there encroached on the same land. All that land that we got was encroached. Now government had nothing else to do apart from going back to square one and that is where we are saying we have to find land suitable for another airport." He said 

"After the people there decide where the free land for the airport is, we are going to send our technical people to do the necessary feasibility studies and after that appropriate designs would have to come in and then we will know what cost implications are going to come because of that airport and then we can look for the resources from donors or from other well-wishers who can support in that endeavor." Said Kasaila

He added that after the decision, Government will send technicians to do feasibility studies and calculate costs for construction of the airport and later look for the resources.

However, the Government decision to wait for the people of Mzuzu to make their own decision, saw a reaction from member of Rumphi Central, Kamulepo Kalua who protested against such decision by asking Government to make a conclusive decision forcing people to vacate with immediate effect from the already identified land.

But the Transport Minister said "It is not up to me (Government) to go and impose on the people",  "The ball is in their court." He added

The passed bill according to Kasaila will also boost aviation sector now that the Japanese are coming next year to provide an extension of the terminal building at Kamuzu International Airport. Through the Japanese project, there will be two separate buildings to allow domestic flights and international flights passengers use their own terminals.

National Wide Public Works Programme Commence December

Goodall Gondwe

Government to begin a national wide Public Works Programme budgeted at K9 billion by December this year up to May 2016.

Minister of Finance, Economic Planning and Development disclosed in the National Assembly during his Ministerial speech on the status of the economy that each district will receive a minimum of K200 million and people will work for 20 days at a fee of K600 per day.

He emphasized that the large part of the programme will be devoted to tree planting along the rivers to strengthen Malawi resilience to catastrophes. 

“In order to improve rural incomes and boost demand for domestic products and to provide resources to the rural population to purchase Farm Inputs in readiness for the next rainy season, the Government will establish an expanded Public Works Programme that will be managed by the local councils through the Ministry of Local Government and Rural Development, MASAF and supported particularly by Ministry of Natural Resources, and Ministry of Transport and Public Works.

“It is felt that this year we could particularly focus on the planting of trees alongside our main rivers. It is planned to spend more than K9 billion on this programme.”

“On the average, resources will be distributed country wide of more than K200 million per district. It will be expected that an individual can be eligible for 20 days work at rate of K600 per day.” He said with plause of Bommaaa! Among Government MP’s

He explained that this year, the programme will have two cycles. The first part will start on 1st December to 31st of March 2015 and second part will kickoff in April to May 2016. 

Earlier the minister said Government will also focus on an expanded production of legumes to help the country diversify agricultural exports and earn the country US$200 million per year. 

“That is together with mineral exports, our exports could double in the medium term” he said “An expanded production of legumes will also enhance rural incomes reduce poverty significantly”

He said the ministry or Industry and Trade has already secured external market for the legumes to be produced.

He said the two are part of non budgetary initiatives that the country is geared to undertake

Short Term Plans, Good Weather Condition To Rebound Economy In A Year-Gondwe

Malawi exprerienced floods

Government says through number of strong measures being pursued and given good weather conditions this year, the country will resume economic stability within a short period of time.

Gondwe: Economy will normalise soon

Minister of Finance Goodall Gondwe, made the promise on Wednesday in the National Assembly when delivering a Ministerial Statement on the Economic Status of the country. 

He repeated several times in his speech that the basic origin of the current destabilized macro-economic environment was huge 49% currency devaluation, free float of exchange rate in May 2013 and continued withholding of the budgetary support by donors.

“Within the public sector, withdrawal of budgetary aid in 2013-2015 exacerbated this poor economic situation resulting in excessive government domestic borrowing (of up to K122 billion) and huge payment of arrears (of up to K155 billion). Therefore the public sector is being forced to take stringent budgetary adjustment that involves realigning budgetary expenditures with reduced total budgetary revenues.” He said 

He said this was exacerbated by catastrophic weather conditions early this year when the economy was beginning to normalize and resuming robust economic growth path.

He said the calamity of floods and drought in January 2015, have caused acute shortage of food countrywide and severely damaged tobacco production which is a key export commodity that helps to stabilize the exchange rate.

Gondwe therefore admitted that the country’s Macro-economy is destabilized as evidenced by persistence high inflation rate, high level of interest rates and volatile depreciating exchange rate. He said demand for goods and services is declining steadily, economic activity has slowed down and inconsequence the employment levels and incomes are stagnant and poverty levels are rising.

Gondwe however said Malawi is taking strong adjustment measures as regards the budget and fiscal reforms including measures that will require stringent sacrifices as other countries did in 1990’s.

He said other neighboring countries passed through harder times than Malawi is facing now and there is hope that Malawi will make it through this tough time. However his remark stirred differing views in the House.

He said in the Government short term agenda the goal is to resume economic normality in the coming year or two.

He said to address these problems Malawi has aligned number of initiatives and programmes including implementation of IFM programmes.

“In order to achieve macro stability and to maintain it we will have to confront challenge of diminished budgetary revenues as a result of the loss of the budgetary support. IMF verdict that its programme in Malawi is off-track beckons the need to reduce to take further measures to reduce budgetary expenditures urgently and to exercise caution in the management of resources” said Gondwe while informing the House that Government has began to implement these measures

He also mentioned continued deeper budgetary adjustments, inconsiderable sacrifices from every Malawian including state and private institutions and exercise stringent discipline in the use of resources.

He said government is also enhancing public finance management reforms as an important part of economic policies that could lead Malawi out of its problems by reforming fiscal system to enable heightened fiscal control and reporting. He said the programme is instilling the fiscal discipline so that available resources are used efficiently.

To combat hunger he said Greenbelt administration has been requested to prepare a double cycle of maize production that can produce about 1 and half million tones of maize and beans. He added that large agricultural firms such as Illovo has been asked to produce maize which government can buy in case of weather.  

He said with rigorous implementation of programmes and initiatives will be able to change the economic outlook of the country.

He said however that there is need for Malawi to take strong adjustment measures particularly as regards the budget and fiscal reforms including measures that will require stringent sacrifices as other countries did in 1990’s.

He said other neighboring countries passed through harder times than Malawi is facing now. However his remark stirred differing views especially strong protest from Mangochi Monkey-Bay legislature Ralph Jooma who said it was wrong for the minister to tell people that they will have to go through times that neighboring countries experienced.

What were government expectations if budgetary aid was available and there was no floods and drought?

Minister of Finance said government expected conducive economic environment in 2014-2015 financial year after expecting good harvest of food and cash crops and after creating disciplined fiscal system a condition set by donors to resume budgetary aid.

Gondwe added that despite the expectation of government to restore budgetary support in 2014-2015, Government framed a cautionary budget centered to curtail budgetary expenditures so as to balance diminished revenue levels. He said the budgetary adjustment was to be a forerunner of measures that would continue to be needed to establish budgetary self sufficiency.

He said the focus of the budget was to reduce inflation rate that could then trigger the decline in the level of interest rates brining about the resuscitation of the needed robust resumption of growth and poverty reduction.

“True to the government expectations inflation commenced to decline progressively and reached 18.2% in March 2015 from 37.9% in 2013. Food inflation decelerated from 38.2% to 17% during the same period and non food inflation declined from 42.8% to 17.8%” he said 

He said the January 2015 the catastrophic shock floods (drought conditions brought acute food shortage) reversed macro-economic gains that were beginning to be experienced. “The inflation began to rise again, and policy interest rate was increased to combat heightening inflation pressures and prevent possible loss of foreign reserves.”

He said the exchange rate also began to depreciate steeply and registered a plunge of 23.3% between January and September 2015 but said this rise was one of the lowest in the region in the same period.

New Amendment Oblige Banks To Send Credit Information To Credit Reference Bureau

The National Assembly has passes an amendment bill that oblige by the law, all Persons lending and financial institutions like banks and to provide to the Credit Reference Bureau with repayment history and current debt profiles of Persons and Companies.

On Tuesday evening the House passed Credit Reference Bureau Amendment bill with overwhelming support from main opposition parties of Malawi Congress Party (MCP) and People’s Party (PP).  

Credit Reference Bureau is a company that allows users to exchange information on their clients repayment history and current debt profiles which compiles a data base that collects, stores, consolidates and process information related to credit history of a person.

However, the Bureau has been failing to get credit information of individuals and companies information from banks. This has been making it difficult for the Bureau to disseminate such credit information among users for their businesses.

Minister of Finance, Goodall Gondwe when presenting the bill in the House, said when the bill was passed in 2010 “We forgot to obligate banks” to send information to the bureau of the profile of individuals and companies on their credit history and profile.

According to the Credit Reference Bureau Act of 2010, (Part II- Operations of the bureau [13 (3 A)] the Bureau may collect credit information from financial institutions and any other institution as may be prescribed by the Minister upon recommendations by the Registrar and consult public sources of information for data in official records.

“In order to obligate them (financial and credit institutions) we have to say that it is mandatory by law for them to send that information” said Gondwe 

The Act provides that the Bureau stores the credit data for a period of 7 years.

National Assembly Authorise US $60 Million Loan On Transport, Trade Facilitation

National Assembly passes a Loan Authorization bill worth US $60 million which is expected to lead to vast improvement on Malawi economies of trade and transportation.

Among terms of the World Bank loan is 10 year grace period within 40 years that will take Malawi to repay the loan. There is 0.075% of interest for the money used but with service charge of 0.5 for unused money.

The National Assembly passed the bill 'International Development Association (Southern Africa Trade and Transport Facilitation Programme Phase 2) Loan Authorisation'. 

No amendment were made but Malawi Congress party through its spokesperson on Finance matters in the House, Alexander Kusamba Dzonzi urged government to also consider improvement of water transport.

Goodall Gondwe Minister of Finance when bringing the Bill in the House, said the bill will support the infrastructure improvement of the three corridors of Beila, Nacara and Dar es Salam.

He said the project will take four years because of number of stages that are to be done that will imply more activities including train young people on issues of the clearance of commodities and various other trades that are involved in the transit goods.

On Mozambican routes Gondwe said, a rail way project is about to complete on the Nacara route and that at Beila, Mozambicans are improving the port. Thereofore he said Malawi is looking for the possibility of improving the railway from Beila to Blantyre and also improve the Chilomo bridge.

While on the side of Tanzania, the Finance Minister said the route to Dar es Salaam road are in bad state including Chiweta road. He therefore said through the loan, there are number of things that will be done to make Dar es Salaam a first class route and to make it cheep on trade route.

“But aside from that there are other services that are going to be improved. Things like transit traffic from Dar es Salaam to the South. On Songwe boarder for example you have one side which is the Tanzanian side and the other one is for Malawi. And a Transporter has to declare his goods twice.

So, this loan helps us put facilities in such a way that we are going to have one window in Songwe as well as in Mwanza, Dedza and so forth.” He said 

He added “Also in the process we are going to improve the health facilities of the people involved around there”

The project worth US $60 million loan which is close to K30 billion will take four years because of number of stages to be done that will imply to more activities including train young people on issues of the clearance of commodities and various other trades that are involve in the transit goods.

Global Fund Support To Save Millions Of Malawians-Mutharika

Global Fund gives Malawi US$378 million towards the fight of HIV, Tuberculosis and Malaria.

US$346 million is for HIV and TB while US$32 million is for the fight against malaria. 

After signing Partnership and Acknowledgement of Grants Agreement with the Executive Director of the Global Fund, Mark Dybul, at Kamuzu Palace in Lilongwe, President Peter Mutharika said the support will save millions of lives of people in the country.

There was excitement at Kamuzu palace when Malawi and Global Fund was signing Partnership and Acknowledgement of Grants Agreement 

The US$ 378 million support is the largest allocation that the Global Fund has made anywhere in the world and President Peter Mutharika said the support will save millions of lives of people.

Mutharika said there is need to strengthen tremendous gains made against AIDS, tuberculosis and malaria because there is hope that Malawi can defeat also many other diseases that continue to afflict the country today. 

He said Government is committed to develop innovative ways of locally financing its HIV response and other health programs.

He also said his government has committed to pay US$30 million over a three-year period under the “Willingness to Pay”, towards the National Response to HIV/AIDS, TB and Malaria. 

Minister of Finance, Goodall Gondwe, and Chairperson for Malawi Global Fund Coordinating Committee both assured Global Fund that strong measures are in place to ensure that the grant is used as outlined in the agreement.

The Executive Director of the Global Fund, Dr. Mark Dybul expressed hope that with Malawi will effectively and efficiently used the money because there is clear indication from its leadership in the fight of HIV, Malaria and Tuberculosis globally.

Earlier, making goodwill messages, USA ambassador Virginia Parmer said this grant will help to drastically reduce HIV spread in Malawi and create a free HIV Generation.

While Ambassador Marchel Gerrmann Head of EU Delegation said the new agreement is a valuable contribution to Malawi which is facing at the moment economic problems.

But, UN HIV Director, Michael Sidibe, in a video clip said Malawi s making headways globally in the fight against HIV citing its commitment by adopting the Option B+ and Vision 909090.

In the three year agreement Malawi is expected to receive US$616 million to be divided between ActionAid, World Vision and Ministry of Health.

Kamlepo Call For Peter Mutharika Resignation Over MSB Sale

There was a heated debate in the National Assembly after learning that the Malawi Savings Bank sale has been reached and the government has signed the deal with FDH Bank on Thursday morning.

The information reached the house in the afternoon and resulted into the early lunch break as members began to demand for more explanations from the government over the decision.

Immediately the house resumed sitting in the afternoon a lot of members of parliament including Uladi Mussa, member for Salima South asked why the Minister had decided to sell the bank yet the house had on Wednesday passed a motion which restricts sale of MSB instead, provide enough resources.

He even asked why the sale was done yet the president announced the suspension of the sale.

However Minister of Finance Goodall Gondwe said “Before we took this action president announced his decision that we can now go on with the sale.”

The national assembly passed resolution to halt to sale the bank when the committee on Budget and Finance on Wednesday brought in the house, a report which recommended government to use other avenues except sale of the bank

Rumphi East legislature, Hon. Kamlepo Kalua while wonder to whose interest did the President had announced the decision to sale the bank made a strong call that “Am therefore calling the resignation of the president of the Republic of Malawi Professor Peter Mutharika!

Chakwera

But Leader for the house in the National Assembly Francis Kasaila tried to rescue the president invain by saying “This is an executive decision on behalf of all Malawians” and added that the decision was legal

Leader of Opposition Hon. Lazarus Chakwera said, the decision to sale the bank was lack of transparency from beginning to end

He said the minds of the executive were made up to go for the decision and set aside loads of calls from the public.

He said people should expect more problems in future and the poor Malawian will pay the price.

He also bemoaned that the relevance of National Assembly on the matter was overlooked

There were emotions as the motion was being debated to the extent that the Deputy Speaker of the National Assembly Esther Chilenje pleaded for debate of the matter with “sober mind”

Chairperson for Agriculture in the National Assembly Hon. Felix Jumbe registerd his concern in the house saying the sale of MSB is a loss to Malawi’s strategic asset.

He even suggested that Malawi would have recapitalized the bank by asking people to contribute K20, 000 per person which would have raised over K50 billion.

“You are causing poverty to people of Malawi by selling the Malawi’s strategic assets” and pleaded for rescind of the decision 

Hon. Juliana Lunguzi

Dedza East Parliamentarian Juliana Lunguzi described the sale as one of the worst decision ever made and worried if the laws of the land are any important regarding that by requirement of the law the house had presented report which the whole house adopted and restricted the sale of the Bank. She then questioned the relevance of the existing laws.

MSB Sold to FDH as Inde Bank Bought By National Bank

The Malawi Savings Bank (MSB) has finally been sold to First Discount House (FDH) Holdings Limited, Malawi government’s preferred bidder committing to invest K9.5 billion including K5.4 billion for the existing shares.

Government has justified the sale saying the unanimous support to sale the bank was made by the Academia, Economics Association of Malawi, Banker’s Association of Malawi among others through various debates it conducted.

“It was, however, appreciated that any attempt to abort the transaction would deeply harm the financial sector and the would aggravate the country’s risk ratings.” Said Finance Minister Hon. Goodall Gondwe at the signing of the bank’s sale Thursday morning

FDH Holdings offered K5.4 billion in respect of 80% of the shares of MSB and claims the offer is far in excess of the bank’s net assets which the independent valuation done by ECAMA and Professor Ben Kalua, had placed at no more than K4.5 billion after excluding toxic assets.

Of the 80% shares to be acquired by FDH, 5% shall be sold to the staff and the 20% Government shares shall full ultimately be listed on the Malawi Stock Exchange for Public participation.

The total investment by FDH Holdings will consequently be; Purchase price for the shares- K5.4 billion, Capital subscription for Basil II-K3.20, Investment in ICT-K0.90 billion and the total investment is K9.50

“It is important to note that all the bids were prepared on the basis that the Government would hive off the off the toxic assets. Had the toxic assets remained in the bank, the offer price would have been significantly depressed.” Said Gondwe

Goodall Gondwe further said government has established a special purpose vehicle in order to optimize efforts of recovering the toxic debts owed to the MSB and that professionals have been appointed to recover the debts. He said those who may fail will have their assets confiscated and within six to one year the experts will have finished the the job.

Gondwe has further assured that MSB sale will “benefit from a more dynamic and innovative management through private sector participation and added that any further delays in implementing the sale may precipitate into untold arm on the economy, and may greatly undermine the integrity of Malawi’s system.”

Meanwhile, Inde Bank, has been sold to National Bank of Malawi (NBM)

The bank has been sold to a tune of K4.7 billion which is 67% of shares where by K1.6 billion is for the regulatory requirement for the recapitalization. And this sums to K6.3 billion.

MSB Sale Unstoppable Says Goodall As Parliamentary Committee Halts The Sale

Chiphiko listening to Petition on halting MSB sale

Malawi Savings Bank (MSB) sale will not be stopped confirms Finance Minister Hon Goodall Gondwe, amid adoption of the Budget and Finance Parliamentary Committee’s report  in the National Assembly which calls halting the sale of the Bank.

The Report was adopted on Wednesday evening by the house which asks recapitalization of the bank and sale it later if necessary.

Chairperson for the Committee Hon. Rhino Chiphiko when presenting the report noted that the sale of the bank is motivated by interest of very few business individuals connected to the ruling party including one major FDH shareholder Mr. Thom Mpinganjira.

He said the determination of the real value of the bank was a guess work as such the bank is going away on a giveaway price. Ina addition he said having one bidder which is FDH bank for such a big asset “Has heavily compromised on transparency and fairness of the process”

The committee said it was informed that the FDH bank had offered K4.9 billion for purchase of 75% shares in MSB.

After presenting the report which has been noted by the whole house on Wednesday, Chiphiko in an interview likened selling of the bank to FDH, to “Goat eating a Cow” as the bank is too small to buy the biggest bank in Malawi with number of branches across the country.

Chiphiko noted that since the house has adopted the report any process of selling the bank would be challenged in court by the house.

“The process of selling the bank should be floated on the Malawi stock exchange” said “I’ve been told that the stakeholders who would like to buy the bank are at the Capital Hotel to sign the papers, they can go on and sign the papers. But we’ve got the case here. Parliament will go to court because the report has been adopted by the whole house. And the house is the representative of all Malawians so the sale will be challenged if it continues” said Chiphiko

He said the committee also fear that the sale of the bank will lead to lay off of about 630 employees just like how previous privatized companies had done.

Chiphiko said the committee emphasized the need to recapitalize the bank with K4.5 billion that is required to make it stand on its feet so that it can meet Basel II requirements and possibly sale it after 3 to 4 years when it is in good shape and not at its weakest as it is now.

Meanwhile Minister of Finance, Economic Planning and Development Hon. Goodall Gondwe while describing reports that the bank has been secretly sold as of Wednesday ‘hearsay’, he said the sale of MSB is unstoppable what remains is when and how.

He said though government will go for analysis of what has been said both by experts and parliament but said selling the bank is the best recapitalization as alluded to the report and other calls being made since government will be free of any obligations of controlling the bank.

“The House did not stop the government from selling the bank, they noted the report and there was no vote passed.” Said Gondwe

“We are selling the bank because we are being forced by the Basel II requirement where we are considering the recapitalization of the bank. I expect that it will no longer be the responsibility of the government to constitute and meet the requirement of Basil II it will be the new management responsibility” he said

“All experts recommended that we should sell the bank and the only difference was when and how that should it be done and that was left for us to decide.” Added Gondwe

“In our case we have to decide when and how to sell the bank. If we don’t sell the bank the depositors will lose all their money is that what we want? Because the bank will find it difficult to find the money to pay the depositors when they want their money out if we don’t sale it. But we have an obligation to ensure that depositors do not lose their money”

Asked if he is afraid of the warning that the house will challenge the decision in court, Hon Gondwe said “No!, no, no, the courts are there for all of us to appear there, we will go to court and follow them, that is not a problem”