District councils must think commercial, says Development Fund Authority

Development Fund for Local Authority (DFLA) has asked district and city council in the country to think commercial if they are to be independent financially that is in line with decentralization.

DFLA Chief Executive Officer Cydex Makunje said this in Nkhata Bay after monitoring and evaluation tour for Nkhata Bay district council rest house which is under rehabilitation with K50 million loan from the institution.

“We promote and encourage councils in the country to think commercial. District councils need to be independent in revenue as it is in line with decentralization,” Makunje said.

He said that many district councils have accessed the institution loans which he said is soft when it comes to interest.

“Reverse Bank of Malawi prime rate is at 16 percent, we add 1 percent for commercial loan which comes to 17 percent as interest. But if it’s infrastructure project we minus   1 percent that comes to 15 percents. So, our loan is very soft,” Makunje explained.

On Nkhata Bay district rest house which is being renovated and upgraded into modern motel, Makunje said that they are willing to refinance the project after being impressed with the works being done so far.

“We are satisfied with the works being done so far. And we are willing to refinance the project and that’s our mandate so that the projects complete and the modern motel start functioning.

“If the motel opens it will increase revenue for the council which is good to the development of the district,” Makunje said.

Nkhata Bay District Council Acting Director of Public Works Mathias Nundwe said that K50 million is a loan from DFLA and Council is contributing K2, 7 million as conditions of the contract.

Nundwe further said that Council wants to request DFLA top up the loan that will cater for all additional works which are supposed to be done but currently the provision of the later loan can not suffice for all the works.

“Currently, council has approved K57 million as an additional funds for the outstanding works.

“We have additional works as plastering exterior walls, painting of roof, drainages, provision of business centre, perimeter fence and other ancillary works,” Nundwe said.

Some of the projects districts councils have benefited from Development Fund for Local Authority includes; Mulanje and Mbelwa district rest house, in Phalombe its Migowi motel and Ntcheu -Sangano houses.

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