MCP to take govt to task over Malawi Savings Bank ‘toxic’ assets: Kapito says govt ‘stealing from poor’

Budget session of parliament is set for stormy run and the political temperature across the country is also likely to soar with opposition Malawi Congress Party (MCP) set to take government to task over  the K6 billion promissory notes to clear  Malawi Savings Bank (MSB) toxic assets and save individuals who took loans from the state-owned bank.

MCP spokeswoman Dr Jessie Kabwila who is also, Salima North-West MP said they will demand answers and transparency in the way the state-owned financial institution is being sold.

“We will make every effort to corner this government on all important issues. These include the sale of Malawi Savings Bank. Let Government be transparent with the matter,” she said.

“We will  put the government on the mat,”  she added.

Dowa West Member of Parliament (MP) Alexander Kusamba-Dzonzi (Malawi Congress Party – MCP) who in the previous sitting of parliament moved a private member’s motion blocking the sale process, said he will also demand answers on the way government is handling loans from individuals before the sale.

Government is seeking financial strategic partners to finance MSB which is struggling to meet Basel II requirement and the bank needs a financial injection of K23 billion.

The Public Private Partnership Commission (PPPC) recently unveiled FDH Financial Holdings Limited, owners of FDH Bank, as the only bidder to become the strategic partner after offering K4.9 billion for the 75 percent of the bank’s shares.

The government’s divestiture agency has since suspended the process following a court injunction.

Government asked the Reserve Bank of Malawi (RBM) to issue K6 billion promissory notes to take the toxic loans off the MSB books. The government has committed the money to repay loans that 13 private sector players took from the MSB and failed to repay.

The individuals are mostly known supporters and financiers of the ruling Democratic Progressive Party (DPP) who include to Mulli Brothers Limited (MBL)—whose managing director, Leston Mulli, is a known a close ally of former president the late Bingu wa Mutharika, the elder brother to the current leader, Peter Mutharika. Roughly 83 percent (K4.9 billion) has gone  to clear Mulli loans.

Consumers Association of Malawi (Cama) executive director John Kapito said the actions by government on MSB “ is very strange.”

He said: “ This is pure stealing from the poor and should never be allowed in a poor economy like Malawi.”

Budget and Finance Committee of Parliament chairperson Rhino Chiphiko said they will continue raising the issue in Parliament.

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