Opposition legislators took turns to query Export and Import Bank of China moved by Minister of Finance, Economic Planning and Development Goodall Gondwe on why government is taking a loan of K16.5 billion from Export and Import Bank of China on behalf the Electricity Supply Corporation of Malawi (Escom).
MP for Mangochi Monkey Bay (PP), Ralph Jooma asked Gondwe on how long the National Fibre Backbone Project, which they are lending the money for, will take to completion and what is the return on investment on the project.
“We are only hearing that because bank and other institutions shall be connected, then we shall make money out of it. I think we need to hear from the Minister more about where the money will come from to repay this particular loan.
“Secondly, now that we are not only guaranteeing ESCOM but we are actually taking a loan and on lend to them, we would want also to hear about the debt sustainability of ESCOM. We know ESCOM owes a lot of institutions and a lot of money also including Malawi Government and a lot of banks,” Jooma said.
He said the debt sustainability of ESCOM should have actually been laid bare in parliament.
“We are giving money to an institution probably that is vulnerable,” he said.
Jooma asked for assurance from the Minister of Finance that there will be a Parliamentary Committee that will monitor the resources because “this is not guaranteeing but we are taking the loan on behalf of ESCOM and we want Parliament to be closely involved in the implementation of this project by ESCOM.”
In response, Gondwe told Parliament: “We are borrowing from China and our experience with China, Export and Import Bank of China is that they are very reluctant to be dealing with a private entity. They would rather deal with the government. And in this space we were put on number 3 in the list because it was government. If it was somebody else it would have taken us a long time to get the resources.”
Gondwe explained further: “Now, there are three types of borrowing, one, and government as we are doing now, we can borrow with a guarantee as I said. Guarantee means that ESCOM would borrow and then we would guarantee that it is going to repay. This is not first now, or you could borrow as we are doing and lend the resources to the power company.”
The Finance Minister said the policy of the government even before the independence, is not to be ready to allow such corporations to borrow.
Nkhata Bay Central MP Ralph Mhone (PP) told the House that opposition People’s Party support the loan bill because it strongly believe that the world of internet is very important for the development of Malawi.
“The internet enhances even the economic growth of the country,” Mhone said, adding that “if there is only one area in this world where tribalism, ethnicity, regionalism, has got no say, is in the field of internet. Anybody can be anything in the field of internet. And in that regard, we strongly support the high penetration of internet in this country, because in the internet, it is a bodiless world. Even the nobodies become somebodies in that area and it is that regard that we highly commend this bill. “
Mhone, however, wondered if the project was not duplication, pointing out that there was work that was done under the World Bank, which is popularly known as SIMBANET.
“That is an issue that needs to be looked into. Are we not borrowing more money than we actually require? Because in those other districts, there will be duplication definitely where SIMBANET Network goes through. And most of it, if the first part of the fibre network went as far as Blantyre, Zomba, Mzuzu and National Fibre Network by SIMBANET goes as far as Dar es Salaam to connect with the Eastern African Cable, it means most outlets have been covered,” he said.
Mhone further said Press Corporation Limited also has another Fibre Network covering the whole country.
Finance minister emphasised that enhancement and improvement of internet connectivity will translate into improved service delivery in public offices.Follow and Subscribe Nyasa TV :