Chakwera is right, banks and corporations are treated as sacred cows in Malawi

It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. ~ Henry Ford

Malawi’s leader of opposition, Lazarus Chakwera recently ruffled a few feathers when in his response to 2014/15 proposed national budget he accused Malawi government of offering ‘tax breaks’ to banks and corporations at the expense of struggling Malawians. ‘Experts’ on taxation and monetary issues swiftly faulted Chakwera’s statement on technical grounds.

Corporations and monetary institutions have ‘experts’, including the best legal minds money can buy to talk on their behalf. Monetary institutions tend to be faceless. Chakwera was not going to win the argument. The ‘experts’ explained to The Nation newspaper of 21/09/2014 how Chakwera got his facts wrong and how the institutions are not enjoying the said ‘tax breaks’.

I am not an ‘expert’ on these matters so I will avoid all technicalities, in case I get something ‘wrong’ as well. However, it is important to point out that even though some specifics of Chakwera’s statement were technically ‘wrong’, the essence of his statement is valid: banks and corporations are making extortionate amount of profits over poor Malawians.

Chakwera: Right

Chakwera: Right

‘Experts’ can always argue on technical grounds because they take advantage of legalese, disregarding the reality on the ground. This is where the difference between Chakwera and the ‘experts’ comes in. ‘Experts’ speak for their employers and people who give them consultancies, not poor people who cook and wash for them.

On the other, Chakwera, as a politician, is a people’s representative. It is his duty to speak for the unheard, folks who do the cooking and cleaning for the ‘experts.’ Chakwera spoke for the majority who stand to lose badly in this sacrificial ‘Zero-Aid’ budget. He wants the sacrifice shared.

Intelligence is not a preserve of the powerful elite, poor people knowledge and feelings as well. Only that they lack means and channels to express themselves. This is why their representatives like Chakwera must speak for them. ‘Experts’ have easy access to the media because they are considered ‘newsworthy’. Even worse, whatever ‘experts’ say is treated as gospel truth and often reported unchallenged as if their opinions are value-free. The poor mainly get into the media as helpless victims looking for sympathy. So they are hardly taken seriously.

Chakwera may not have been technically correct but the truth is that banks and corporations, specifically mobile phone companies, are minting in this country, at the expense of poor Malawians.

In April 2012 when the country’s economy was in free-fall, following Bingu wa Mutharika’s failed economic experiments, Nyasa Times reported on “Malawi banks ripping off clients in 2011 [financial year].” Mind the semantics, the word ‘client’ is preferred by marketers because it sounds more innocent, you get a different sense when you replace it with citizens, which is more accurate. Nyasa Times reported:

“Among these [banks] are Standard Bank, which has achieved an after tax profit of MK3.5 Billion from MK3.5 billion in 2010. National Bank of Malawi has made MK1.6 billion profit, up from MK1.4 billion recorded in 2010. While FMB has registered a net profit of MK2.01 for the year ended December 31, 2011, which is an increase from MK1.8 billion made as at December 31, in 2010.”

When unpicking Chakwera’s statement these issues needed to be taken into account. Adding these issues into context one cannot fault the essence of Chakwera’s statement. He has a point when he says banks are reporting “unconscionable profit margins on the backs of working Malawians whose purchasing power is steadily being bled to death.”

Let us face it, poverty is a tale of our time. Read your newspapers and you will see. The Nation of 3rd September 2014 reported on Innovation for Poverty Action report, which has established that “only 2 people of 100 graduate from poverty in five years.” You may hear about economic growth and impressive GDP figures Malawi is registering but these do never correspond with the reality on the ground.

Every human development report makes a grim reading. In a second successive year, the 2014 United Nation’s Global Human Development report has ranked Malawi on 174 out of 187 countries. This is a country where banks are making exorbitant profits. Malawi has some of the most expensive Mobile phone tariffs world. Yet, mobile phone companies get tax reduction?

Press Corporation Limited, the country’s largest conglomerate, recently announced MK10.6 billion after tax profit. Of this profit, The Nation newspaper quoted the groups, Chief Executive Matthews Chikaonda, “Telecommunications segment [of the conglomerate] which comprises Malawi Telecommunications Limited (MTL) and TNM delivered ‘exceptional’ results.” And why not when TNM announces MK1.8 billion profits? People are feeling it.

It is not a coincidence that the former Cabinet Minister, Clement Stambuli has joined the chorus reverberating across Malawi to boycott Airtel Malawi Blackberry services following an upward revision of their services.

We must see things as they are. Growing banking sector is of no use for poor Malawians majority of whom live on less than a Dollar a day. Of what use are incentives on ‘banking vans’ and ATM machines in a country that has majority of its citizens earning their living in the informal sector where 2 out of 5 of them are reportedly earning MK10, 000 a month?

Yes, “Chakwera, others should speak from informed point,” as The Nation editorial (12/09/2014) argued. Herein is some evidence that Chakwera is not dreamer – banks and corporations must contribute more to the economy, and it is the role of the government to ensure that this is the case. No society can be happy and call itself civilised if majority of its citizens are poor and living in misery.

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myao weni weni
Guest

The profits are abnormal indeed. To some extent I agree what the leader of opposition is saying.

Jelbin mk
Guest

This is food for greater thoughts keep it up Mr.

Kamatchetcha
Guest

nyc blog MR..you have articulated very constructive points…. Chakwera z right…but i think its all about politics…bcause with zero-aid budget, myt demand heavy domestic borrowing and the gvt z tryn to play it smart if the banks hve to release the funds when needed. Banks exploit poor pple…

true man
Guest

tax holiday, why not gvng to new employz?

jobo
Guest

Awa ndiye a president anthu.

Kanyama Chima
Guest

Chakwera is right. The banks are ripping us out of our sweat. Imagine an increase of 138 percent in profits . Koma kuMalawi!

Optic Computer
Guest

Try to open an account of say K15,000 and try make no transactions for two years. If you back to check your account balance, you will be lucky to find any tambala there. All will be reduced to nothing through service charges. You will probably even find ngongole yoti ubwezere bank yo.

Usova
Guest

Banks and cellphone companies are rich because of corruption Ask anyone who knows.

wobeba wanga
Guest

achakwera pitani mukalalike inu

Nobel
Guest

Its a syndicate. Let Chakwera reveal these robbers.

wpDiscuz

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