The opposition in Malawi’s parliament has not taken kindly President Peter Mutharika’s move to proceed with the disposal of government’s majority shares in the Malawi Savings Bank, saying his actions have demonstrated ‘undemocratic tendency of the highest order’.
On Thursday afternoon tempers flared in parliament as the opposition called for the resignation of both the president and his finance minister Goodal Gondwe for not living to their word on suspending the sale until adequate consultations were done.
Government has disposed off its 75% shareholding in the bank and says will cling on to 25% for three years after which they will be offered to public through the Malawi Stock Exchange.
The opposition took advantage of Thursday, being a private members day, to question the decision by government with MP for Rumphi East Kamlepo Kalua being the first to seek clarification.
Finance minister Goodall Gondwe officially told the house that the bank has been sold to FDH Group Limited, largely owned by Thom Mpinganjira, after what government thought were enough consultations.
Gondwe said there have been a lot of consultations on the matter where civil society organizations, economic experts and Malawians debated and reached a conclusion to sell the bank.
He warned that the bank would have gone bankrupt if it were not sold.
“Government would need K32 billion to pay off depositors,” he said.
Mr Kamlepo called on president Mutharika to resign saying he has failed Malawians.
His view was supported by MP for Dowa East Richard Chimwendo Banda who said government has gone against the Constitution of the Republic of Malawi which does not allow government to sell over 49% of shares it holds stakes in a business entity.
Leader of opposition in the house Dr. Lazarus said the opposition is disappointed with the process of selling the bank which has demonstrated that dealing with issues raised by Malawians through parliament is not as crucial as sticking to decisions already made.
He said the sale has sent a message to people that their representatives in the house and what they recommend do no matter.
Leader of the Peoples Party in parliament, Uladi Musa said the 75% shares government has let off were too much.
Leader of Government in the august house Francis Kasaira assured Malawians that all MSB branches will be maintained.
Last month President Peter Mutharika suspended the process of selling the bank to allow government consult widely, especially with the opposition and civil society organisations.
ome critics have said president Mutharika did this to only pave way for the passing of the 2015 National Budget as the opposition had vowed not allow the Appropriation Bill pass unless the MSB matter was resolved.
Opponents of the deal feel the bank was undervalued and also accuse government of trying to cover up loans that were dubiously provided to political figures connected to the ruling Democratic Progressive Party.
There are also concerns that selling the bank would affect its operations that mostly benefit rural Malawians.
But government argued the bank had to be sold because it was almost bankrupt and its capital was far below the internationally accepted Basal II, a set of banking regulations put forth by the Basel Committee on Bank Supervision, which regulates finance and banking internationally to ensure institution liquidity.
The MSB sale has gone through along with the sale of Inde Bank, another government owned bank. National Bank of Malawi has acquired government’s 67% shares in Inde Bank.
The government will still hold the remaining shares through the Agricultural Development and Marketing Corporation (Admarc).
National Bank of Malawi has acquired the government shares in Inde Bank at K7.6bn.