Malawi MPs want K15m each

Barely 30 days in office where they have found a near bankrupt government failing to buy even drugs for hospitals, parliamentarians are demanding that their personal loan facilities be doubled, a move that could worsen Capital Hill’s cash-flow woes.

National Assembly sources said on Friday that Members of Parliament (MPs) want their personal loan limit to jump to K15 million (about $40 000) each from the K7 million (about $20 000) previous members were entitled to.

If the proposal passes, government needs to fork out nearly K3 billion (about $8m) for the 191 MPs that are currently in the House, an amount that could repair 500 mortuaries with problems such as the one Kamuzu Central Hospital (KCH) suffered some months ago that needed K6 million to save bodies from rotting.

A source said the proposed K15 million loan package consists K10 million (about $26 500) for a motor vehicle, K4 million (about $10 500) as general purpose loan while K1 million (about $2 600) is emergency loan.

MPs in the previous Parliament were accessing K5 million (about $13 200) as motor vehicle loan and K2 million (about $5 263) for general purpose.

Another source told Nation on Sunday that the MPs initially demanded a loan package of around K27 million (about $70 000), but tough negotiations cut it to K15 million.

Acting Clerk of Parliament Roosevelt Gondwe could not confirm the proposal and referred Nation on Sunday to Treasury.

Treasury spokesperson Nations Msowoya, in a telephone interview on Saturday, said he was aware of the proposal Parliament has sent to government for MPs’ new loans.

He, however, said discussions with Parliament’s representatives were still ongoing to reach a compromise on the issue.

Msowoya said discussions bordered on several elements of the loans and government would only make a decision after the issues were sorted out.

“We want to understand the long-term sustainability of the loan scheme, the cost of the scheme, the source of the money and the implications of the loans on the salaries of the MPs,” he said.

Msowoya said government needed to know how much MPs would be taking home after loan deductions, adding that Capital Hill wants to come up with a win-win situation.

Our source at Parliament said MPs have just had a 40 percent basic salary increment from K179 000 that previous legislators were each receiving to K250 000.

MPs also have a bulk of non-taxable allowances apart from their sitting allowances when the House is in session.

When MPs had their salaries increased by 28 percent in September 2012, their consolidated package grossed K581 500 and with the latest hikes, they may well be getting over K700 000.

Deductions, owing to loans, constituted almost half of the MPs’ gross salary and the take home package was almost K300 000 per month after the cuts.

In a separate interview yesterday, Speaker Richard Msowoya said he has not yet seen the proposal, but said it might be possible that it has factored in the current prices of vehicles. Like Treasury, the Speaker also raised the issue of take home pay.

“It is a statutory requirement that the deductions on the salary of the MPs should not go beyond 50 percent of the gross salary. So whatever they are working on, they have to put the requirement into consideration,” he said.

Commenting on the MPs’ new demands, Catholic Commission for Justice and Peace (CCJP) national coordinator Chris Chisoni said it seems Malawi entertains some luxurious values without considering the country’s economic status.

Chisoni said, so far, there is no evidence that MPs complete repaying their loans, claiming that taxpayers end up paying for the loans in banks where they are obtained.

The MPs’ demands come even after Finance Minister Goodall Gondwe told the House that domestic liabilities of K500 billion—comprising K158.5 billion in arrears to the private sector for various goods and services that government procured and a domestic debt overhang of K340 billion Capital Hill incurred by borrowing from the financial market—are weighing heavily on the next budget.

The legislators also seem to have missed the memo on donor’s decision not provide budgetary support, a development that deprives Treasury of 40 percent of resources it has always relied on.