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. 

Ombudsman Office Takes Services To the People Through NICE

Office of Ombudsman is optimistic that the Memorandum of Understanding (MOU) signed with National Initiative for Civic Education (NICE) will take its services to all hard to reach areas across the country.

NICE in the MOU is expected to carry out civic education and facilitate people’s complaints to the Ombudsman office.

Ombudsman office admits financial challenges have crippled operations of the office. It fails to support officers to reach out to people across the country and finds NICE as a great help to work with for it has offices all the way down to grass root level.

NICE officers will get trained on identifying matters and on complaint handling in order to supplement Office of Ombudsman mandate of monitoring public service delivery of all public offices and increase presence across the country.

“Now as you are aware NICE has a grassroots, have their offices all the way down to grass root level and that is where this MOU is so important to us and I must admit that am really excited. Because with that then overnight we are able to cover the nation instead of us crying foul that we are underfunded” said Ombudsman Hon Justice Mrs. Tujilane Chizumila

She said Ombudsman has presence in four regional offices; Mzuzu which covers whole Northern region, Lilongwe which covers the whole Central region, Balaka which covers whole Eastern region and Blantyre which covers the whole Southern region.

“So you can imagine a vulnerable person from Nsanje to reach Blantyre and a vulnerable person from Chitipa to reach Mzuzu it’s really asking too much from these vulnerable but, with that training then the NICE officers will be bringing that information to our regional offices.” said Chizumila 

She added “I have forewarned members of staff of Ombudsman that they should be prepared for an avalanche of complaints reaching us. But that is what our mandate is all about.” 

From this year’s budget, Government has allocated Other Recurrent Transactions (ORT) to a tune of K90 million only, yet the office handles a lot of matters from across the country including conducting investigations. 

“There are so many issues involved; we need offices, staff to cover the whole nation, transport, funding for salaries if we are to ask for new officers, funding for stationary and all that. Mind you, most of the vulnerable people who come here most of them are so poor that they cannot even afford to write their complaint on a piece of paper, they can’t afford to buy paper or pen. The reason being that according to the law every compliant that has to come to this office must be in writing. So we are the ones who issue them with stationary.” She explained

Hon Chizumila further noted that the country needs to establish different Ombudsman offices to handle different complaints than having single ‘public’ Ombudsman.

National Initiative for Civic Education (NICE) executive director, Ollen Mwalubunju said his organization is ready to educate the public as well as facilitate complaints to office of Ombudsman.

He said NICE finds it fit to carry out the task diligently since it has similar roles with that of Ombudsman office particularly on fostering democratic governance.

Having structures spread countrywide with 8000 volunteers and 31 district offices, Mwalubunju was optimistic that they will manage play the role of providing information on how people can access Ombudsman offices and fill all gaps that exists with office of Ombudsman.

Mwalubunju said carrying out the civic education is aright partnership which will give Ombudsman services to rural people and not only to urban people as it has been the case.

He said NICE has several approaches that are going to make the civic education of this task fruitful just like they successfully managed civic education during the last elections.

NICE will be forwarding some matters to Ombudsman in an effort to carryout Ombusdman mandate of monitoring public service delivery of all public offices across the country.

At the signing ceremony that took place at the Ombudsman office in the Capital city, Lilongwe some two weeks ago, ‘Then’ Ombudsman Hon Justice Mrs. Tujilane Chizumila on behalf of Ombudsman office signed the MOU with Ollen Mwalubunju Exectutive Director for NICE on behalf of NICE. 

NBM To Turnaround Inde Bank Into Profit Making, Offer New Services

National Bank of Malawi (NBM) has new plans for its newly acquired Inde Bank for both growth and new services.

On Thursday, NBM bought both Malawi Government and ADMARC shares in Inde Bank to a tune of KK4.7 billion representing 67% of shares would use K1.6 billion for regulatory requirement for the recapitalization and this sums to K6.3 billion. The signing agreement took place at the Capital Hill where Minister of Finance Goodall Gondwe signed the deal on behalf of Malawi Government and Mr. George Partridge signed on behalf of NBM.

At the same event government also signed the sale of Malawi Savings Bank (MSB) where Minister of Finance signed on behalf of Government while Dr. Thom Mpinganjira signed on behalf of FDH Holdings

In an interview, NBM Chief Executive Officer (CEO) Mr. George Partridge says NBM had due diligence when placing bid and that after acquiring the bank NBM would look further at how they can do with the bank.

Partridge then said among others, NMB is ready to use its new subsidiary to offer other products that are not offered by Malawi banks. He said NBM will use Inde Bank to utilize offers from Development Banks lines of credits to service Malawians as National Bank is failing to provide them due to its commercial license.

He also indicated that NBM bought the shares to take over the bank so that they can manage it in such a way that it starts to make profits again to prevent systemic risk to the finance system.

“After such long process the anxiety are now over and we can now move ahead and reorganize and restructure Inde Bank into a bank which we would like it to be” He said, “at the moment the bank is a loss making and failing to meet some of the regulatory requirement of the registrar (Reserve Bank) and one of the things is to recapitalize the bank so that it abides to RBM requirement.”

The NBM CEO assured; “We think we can turnaround the bank. We have strategies to turnaround that bank to be profit making bank once again”

He then explained; “We have seen that there are things that need to be done right in that bank and we think that we have ability to do that. We have demonstrated ourselves that we are making profits because of what we are doing. So if we apply the same methods and systems that we have to Inde bank we think we can turnaround Inde Bank, there is no reason why Inde Bank should be making losses.”

NBM has bought Malawi Government and ADMARC shares and will pay the money this week and the part of the money will be used for the recapitalization of the bank since the bank is undercapitalized.

Magna Carta Exhibition Open to Public at Malawi Parliament Building

Magna Carta exhibition 

Malawi chosen to be the only Commonwealth African country to exhibit Magna Carta, open to public at National Assembly building.

Established in England, Magna Carta, is a Latin word for the Great Charter which is both a document and set of ideas issued by King John 800 years ago.

Magna Carta established the rule of law and laid the foundation for personal liberty which acts as a set of principles and reference point for many legal compasses as it has helped to shape liberty, Justice, democracy and the rule of law across the world.

Scales, Mkandawire, Ligowe:Briefing media 

This year, the Commonwealth is celebrating 800th Anniversary of the Sealing of the Magna Carta

Magna Carta is of relevance to Malawi since British settlers in Nyasaland used the provisions of Magna Carta to ensure their freedom and protection of their property by colonial administration. When Malawi became independent in 1964 Constitution included a Bill of Rights that featured largely the civil and political rights in Magna Carta, and now, the 1994 Constitution also has a comprehensive human rights chapter including Sections 28, 41, 42 and section 43.

Martin Scales 

British Deputy High Commissioner to Malawi Martin Scales said the Magna Carta exhibition to Malawi is here for number of successes Malawi has had and continues to exhibit across the world.

He said Malawi was chosen because of the strength of Malawi Constitution and its Judicial Independence including its active role in the commonwealth lawyers and magistrates association.

Scales

The British Deputy High Commissioner added that the Magna Carta is only encouraging states not exercise their powers in arbitrary manner.

Martin Scales said Magna Carter Exhibition in Malawi is a great honor and that’s a reason to celebrate and more reason to go and see the Magna Carta at the National Assembly.

Charles Mkandawire

Regional Vice President for East, Central and Southern Africa, Justice Charles Mkandawire said the Magna Carta brings to the judicial system in Malawi important message.

He said it reminds them their obligation to interpret fundamental values of the Constitution including the chapter on human rights,

“We have to be very robust” He said “And not forgetting the history where we are coming from. Our 1964 constitution had a chapter on bill of rights and in 1966 we scraped it off. But in 1994 constitution we brought back the human rights. Now the judiciary having the mandate in the section 9 of the constitution to interpret the laws of Malawi, the Judiciary has to give the meaning of what the constitution says in terms of the rights of citizens of this country.”

Justice Mkandawire said this exhibition is educating people the importance of fundamental rights and at the same time putting Malawi on the Map for its achievements on stable judicial system, governance system as well, foster confidence to investors that Malawi has a stable legal system that will protect their investment.

Thomson  Ligowe

President for the Judges and Magistrates Association of Malawi,  Thomson Ligowe shared similar views on the importance of Malawi hosting the Magna Carter exhibition

Magna Carter has continued to strongly influence the protection of the freedoms and  fundamental rights and to shape the development of democracy and the legal system in the world.  The Universal Declaration on Human Rights (UDHR) 1948 borrows heavily from the provisions of the Magna Carta.

The Commonwealth Lawyers Association, in partnership with the Commonwealth Magistrates and Judges Association and the Commonwealth Legal and Education Association have organized a touring exhibition entitled “Magna Carta to Commonwealth celebrating the influence of Magna Carta throughout the Commonwealth”

The Magna Carta celebrations and tour exhibition began on 12th April 2015, in Glasgow Scotland and is now in Malawi leaves for Malaysia on 19 July 2015 and finally to Wellington New Zealand where 17th Triennial Conference for Commonwealth Magistrates and Judge’s Association will be held from 13th-18th September 2015.

FDH Boss Says No Retrenchments After MSB Acquisition

As anxiety continue to grow for possible job cuts at Malawi Savings Bank (MSB) following its acquisition to FDH Financial Holdings Limited on Thursday, the new managers jettison such fears. FDH is into serious banking expansion requiring more workers. 

On Thursday, Minister of Finance Goodall Gondwe Malawi Government signed the sale of Malawi Savings Bank (MSB) on behalf of Malawi Government while Dr. Thom Mpinganjira signed on behalf of FDH Holdings.

The sale of the bank has been described by many Malawians as unfortunate great loss of national treasure and that Malawians will face more negative repercusions will follow soon.  

Thomson Mpinganjira CEO FDH Financial Holdings has cast out fears that the acquisition of the Malawi Savings Bank will lead to retrenchment of workers and closure of MSB branches.

But FDH CEO says there should be no worries. He says they are plans to expand their presence in the country and not shrink MSB and that ‘no one will be fired’

“Out of K5.4 billion 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” said Mpinganjira

“We have got vast network and we looked at how we can expand; We can expand by growing slowly 50 years, or acquisition. So we decided to go for acquisition.” He added,  "this acquisition will put us on third position in banking" said Mpinganjira who could not remember their current position in Malawi.

“After this acquisition we are going to become Bank number three. But our plan is to move further beyond number 3 or number 2. And then we will see what happens after 10 years. But for us to realize our plans to grow to even number 1, it means that we cannot start closing down branches or retrenching, because what network are we going to use to grow.” he explained

Speaking of plans for the MSB he said FDH Financial Holdings Limited would like to use MSB penetration to offer insurance services in villages just like all other countries are doing.  

"Our partners Old Mutual are insurance company. Insurance penetration in Malawi is 3% now,  banking is somewhere around 22% to 33% so it is very low. So we would like to utilize the network of Malawi Saving Bank to reach out to the rural masses in insurance” 

“But we think that since the majority of people are in the villages, MSB is not just going to be banking but it also be insurance products that will be taken to the people."

Some protests were
held asking government to
halt the MSB sale process.

MSB was sold told as one way of recapitalising the bank which was failing to meet some regulatory requirements including Basil II due to financial challenge fueled by toxic loans obtained by some businessmen connected to government. 

However malawians proposed that government should have recapitalised the bank with no option of selling it.  

But the FDH CEO has challenged that in a specified period of time the bank will make profits "In three years time the time stipulated in the agreement that which is 24 to 36 month that we must take this bank to the Malawi Stock Exchange to sell Malawi Government portion to Malawians, you will not be surprised because you will be watching developments in the Malawi Savings Bank. But we will make Malawians proud that fellow Malawians were able to do what we were planning to do”

Asked if they plan to rename the bank he said FDH Holdings will be guided by the regulations by Registrar of Financial Institution but now will run the bank side by side. 

FDH Financial Holdings Limited has acquired MSB to a tune of K5.4 billion, with 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.

FDH Fincial Holding Limited owns FDH bank, First Discount House, FDH Stockbrokers and FDH Money Bureau.

Chairperson on Agriculture Committee Felix Jumbe Worried Over STECO, Chitakale Tea Factories Takeover By Mulli; Tea Farmers Petition Parliament

The Chairperson for Parliamentary Committee on Agriculture, Irrigation and Water Development describes the use as collateral the two companies; STECO and Chitakale tea factories by Mulli Brothers and alleged takeover, blow to the farming sector.

Salima Central legislature was reacting to the petition sent to the National Assembly by the concerned Smallholder Tea Farmers from Mulanje and Thyolo districts who wants the House to help them prevent now sold Malawi Savings Bank (MSB) from selling the two tea companies and hand them over back to the farmers. 

MSB announced the sale of the two tea companies in a bid to recover the Billions of Kwacha’s that Mulli Brothers owes the bank. Mulli obtained loan worth Billions from the bank using the two companies as collateral but the concerned Smallholder farmers claims Mulli does not own STECO and Chitakale.

After receiving the petition on Thursday, Hon. Felix Jumbe Hon. Jumbe said as a farmer he is concerned that the problem is deliberate and so many other companies and organizations that should have been owned by farmers themselves were wrongly “taken in such format” citing David White Head and Dairiboard.  He said this is depriving farmers of realizing better income.

He noted that it is sad that Malawi government remains silence as businessmen are taking ignorance of farmers on issues, to enrich themselves saying issue at hand is one of it. 

Hon Jumbe promised that parliament “Will look into the circumstances which led to this situation for Mulli to use collateral of an asset which he was just a shareholder. Even for the change of hands from STECO to Mulli” 

He as well, assured that his committee together with relevant committees including Privatization Committee will investigate and come up with conclusion on circumstances that led to alleged illegal change of ownership of STECO and Chitakale tea factories by Mulli Brothers.

“The two companies were meant for farmers that when they grow their tea they should sell their leaf to the these companies with a view that when they add value, farmers would be benefiting more than just selling the green leaf” he observed

According to the Smallholder Tea Farmers petition, their majority shares were sold to an individual (Mulli) without consulting the will or majority (Smallholder Tea Farmers In Malawi) and as well, wondered why government allowed Mulli to get the two companies.

“We the voiceless farmers were disappointed regardless of pressure against the idea of the sale of the Smallholder facilities and eventually decided to be refugees in our own country and had to look for asylum in the private tea companies” claimed Wilfred Custom who led the petitioner’s

They demand that Malawi Savings Bank (MSB) now sold to FDH Holdings Limited, should exclude STECO and Chitakale in its proposed sale of Mulli Brothers assets since Mulli Brothers is just a partner. 

“Farmers wonder as to why Mulli Brothers used STECO and Chitakale as collateral for obtaining loan from MSB which never benefited the two companies.” He said 

“The proposed STECO and Chitakale remains an issue uncalled for, because the investor (Mulli Brothers) failed to run the two companies in more viable and profitable standard in the sense that he failed to service loans, he failed to pay farmers approximately K70 million for green leaf sales and bonuses” claimed Mr. Custom who added that Mulli has failed to publish audited accounts and implement the dividend policy among others that are in the MOU.

“Government should assist the smallholder farmers to reclaim the two companies and outsource transparent and dynamic management on contract to revamp the operations and finally hand over the companies to the Smallholder Tea Farmers” pleaded the group in the petition

The group has also asked government to revoke the existing Trust Deed of the Smallholder Tea Growers Trust and Smallholder Tea Company and replace with a Trust Deed which will empower growers to manage the company without political interference.   

According to the concerned farmers, there are 15000 smallholders in Malawi with 70% female representation with an average land holding size of 0.4 hectares.

Parliamentary Roles Were Overlooked Says Chakwera As House Adjourn Sine Die

Hon Chakwera

The National Assembly adjourns Sine Die, however The Leader Opposition  says the role of parliament was overlooked in number of issues.

When delivering speech on the moved motion that the house adjourn sine die, the Opposition Leader in Parliament,  Hon.  Lazarus Chakwera said was happy   that the 2015/2016 budget was passed after scrutiny from Opposition and Independent members and  emphasized that equitable distribution of the approved K923 billion be followed and in good time. 

Chakwera however said was not happy with the manner in which some issues had been treated in the house citing the MSB sale and Data analysis report on 92 billion Audit query which now becomes of the K577 billion audit query needing forensic audit.(get it hereWaterhouse Coopers Audit Query)

The Opposition leader added that some have even questioned the usefulness and independence of the house in addressing certain of these problems.

He expressed concern that  implementation of this budget will take place within context of practices that continue to put into question the trustworthiness of those that lead.

And hoped that the next meeting in November, government will bring bills and reforms that require legislations.

Hon Kasaila 

Leader of the House, Francis Lazaro Kasaila before moving a motion that the house adjourn sine die, he thanked the members but noted with concern that their daily attendance for the sitting was worrisome.

He urged all members to improve on this and asked them to stop personal attacks in the house as this will remove the dignity of the house.

This was 45th Session of 4th Meeting opened by President Mutharika on 5th May 2015 with State of the National Address. The house met for 9 weeks and on 15th May 2015 the house agreed to the President Statement

The House has among others approved Chief Justice on 20th May 2015

Presented with Budget Estimates on 22nd May 2015 where each vote and allocations were considered by committees and through general debate. And passed the budget on 26th June with appropriation bill (get all votes here Budget Votes and budget scrutiny report here By Budget and Finance Committee 2015-2016 Committees Report)

The house has passed nine bills and very few referred to relevant committees for further consideration and will be brought back in the house during the next meeting

Out of 205 question posed to various government ministries for oral reply responses, 184 were answered representing 75% achievement.

Speaker of the Malawi National Assembly has however thanked the president and the executive for not interfere with the parliament.