Debate ensues on K7tn grant
Debate has ensued on the $6.8 billion (about K7 trillion) financing deal the Malawi Government and Belgium-based charity Bridgin Foundation signed on Monday with some stakeholders demanding finer details on conditions of the grant.
The grant is equivalent to about three national budgets of Malawi pegged at K2.84 trillion and about half the country’s gross domestic product (GDP) at $12.6 billion.
During the signing ceremony in Lilongwe on Monday, Minister of Finance and Economic Affairs Sosten Gwengwe said the package seeks to finance projects in health, education and energy sectors.
In separate interviews on the deal on Monday, both the Budget and Finance Committee of Parliament and former minister of Finance and Economic Planning and Development Joseph Mwanamvekha said terms and conditions for such a huge investment need to be clear.
Mwanamvekha said what was disturbing about the deal is that the conditions are not known and that going through the foundation’s website as well as other credible sites, it was doubtful the institution has the capacity to provide such funds to Malawi.
He said: “In my years of experience in the financial sector as well as in government, proper due diligence is critical, but we seem to have not done this with this institution. This puts the economy at risk because as a country we could end up losing credibility and trust from development partners.”
Budget and Finance Committee of Parliament chairperson Gladys Ganda, in a separate interview, said her committee is eager to learn the conditions attached to the grant, if any.
“This was not presented in Parliament as the Minister of Finance is not mandated to do so by law. However, if the projects materialise, the committee will definitely play its oversight role on the said projects,” she said.
Writing on Facebook, former Reserve Bank of Malawi (RBM) governor Dalitso Kabambe warned that the said foundation could be one of those bogus institutions that, if not clearly assessed, could end up giving Malawi a raw deal.
He said during his time as RBM governor as well as other roles in government, there were always such tempting offers which proved they were mere “promises and cheap lies”.
Kabambe, who is presidential hopeful for the opposition Democratic Progressive Party, said: “The rule of the thumb always remained that if it sounded too good to be true, then it was not true. A little research on some of the offers always revealed that the offer was a scam.
“But this government is desperate and it has been a victim of cheap scams. The other day it was fertiliser. Then we heard of fuel, now apparently there is a grant in a region of billions of dollars. The terms of the agreement are vague as the institution offering the money.”
But in an interview last evening, Gwengwe assured smooth execution of the grant, saying the money will go straight into the selected projects and Malawi will benefit from the same.
He said: “These people [Bridgin Foundation] are opening accounts here and once they clear their European banks, they will credit the project accounts here. They are not a commercial private entity and, thus, not a PPP [public private partnership]. Revenues from these projects will all be ploughed back into the social sector such as schools and hospitals and no money shall leave Malawi.”
He said the foundation will predominantly use European or America contractors with 30 percent subcontracting locally.
An Internet search of Bridgin Foundation shows sketchy details highlighting that for confidentiality and security reasons, their website is intentionally left without detailed content.
However, a brief description of the foundation indicates that the institution provides funds exclusively for public investments on a PPP model as such contracts are initiated by diplomatic or governmental channels only.
MANA
