Finance Minister Goodall Gondwe confessed Thursday that government is still undecided on what to do with the K9.5 billion realised from the sale of 75 percent of its in Malawi Savings Bank shares to FDH Financial Holdings in July 2015.
“The money is still there and we are yet to decide on what to do with it.
It’s nonsense to think that the money can be abused. We are still weighing the options and the public will be informed,” Gondwe said in a brief response to our query as to the whereabouts of the money yesterday.
But government indecisiveness on how to use proceeds from the sale of MSB bank is very costly, with the Malawi Economic Justice Network (Mejn) warning that further delays may lead to abuse of the funds.
Mejn Executive Director, Dalitso Kubalasa, has faulted the government for dragging its feet on the issue, arguing that it does not make sense for the authorities to keep huge sums of money idle, yet they have the option of investing the funds in profitable causes.
Kubalasa said, ordinarily, a cost benefit analysis ought to have been done to determine whether it was right to offload assets of the bank (MSB) at the time and quickly reinvest the proceeds.
“It’s a huge concern and very costly if you consider the value, in terms of inflation. Possibly, the proceeds are now making profits for some institutions and not Malawians who are the owners of the money. It’s so worrying that the government hasn’t figured out what to do with the proceeds two years down the line. The fear is that we might someday wake up and realise that the funds have evaporated,” Kubalasa said.
Currently, the funds are with the Public Private Partnership Commission (PPPC), an agency that invested the proceeds on behalf of the government.
Kubalasa also described as a lost opportunity the government’s failure to bring into the august House the issue of MSB proceeds. He observed that Members of Parliament could have brainstormed on the way forward.
“There is need for accountability on the issues of assets. Malawians are concerned and let’s not forget that MSB was sold after a public debate and, therefore, taxpayers are justified to [raise] questions as to what has become of the proceeds following the sale,” Kubalasa said.
Gondwe also recently told the media that proceeds from the sale generated an additional K1.5 billion.
He, however, added that the government is unable to use the money because it is currently trying to deal with allegations by FDH that MSB was overvalued.
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