Minister queries Macra’s K1bn monthly expenditure

Minister of Information Gospel Kazako has questioned how Malawi Communications Regulatory Authority (Macra) has been spending about K1 billion monthly on its operations.

In an interview after  a familiarisation tour of the institution yesterday, Kazako said records indicate that there have been some undeserving activities leading to such spending.

He said: “So, [according to the records] about K250 million was being used per week, that is K1 billion per month. But  31 percent of the K1 billion was being used on staff costs, 18 percent on regulatory activities and the remaining 51 percent on undeserving activities.”

According to Kazako, some of the undeserving activities include bankrolling activities of the previous governments, subcontracting car hire services and manipulating allowances for employees at the institution.

He said the Tonse Alliance administration wants to seal all loopholes that may have led to the abuse of funds in such magnitude, describing what used to happen as “a well-coordinated system”.

Macra has in the past been blamed for being lenient towards the taxpayer funded Malawi Broadcasting Corporation (MBC) while suppressing private broadcasters for airing dissenting views from government.

However, Kazako said Macra will be left to do its work professionally, adding there will be changes with some “casualties” expected. He said there will be a functional and structural review to appoint people on merit.

The minister also asked the institution to reduce data charges, saying they are exorbitant for Malawians and a setback to the country’s economic development.

Two weeks ago, some civil society organisations (CSOs) asked government to reduce the cost of ICT services, especially Internet, following a suspension of physical meetings amid the coronavirus (Covid-19) pandemic.

In addition, the CSOs were also lobbying for the removal of value added tax (VAT) on Internet services. Currently, mobile operators are charged 17.5 percent VAT on mobile phones and services while 16.5 percent is charged on Internet services.

Kazako said government cannot completely remove tax on some of the services, but agrees that data tariffs are too high for a developing nation like Malawi.

He said it is sad that telecommunication companies are enjoying huge profit margins while Malawians are finding it hard to cope with such challenges.

On his part, Macra director general Henry Shamu said the regulator will invite mobile phone operators to discuss how they can go about reducing data charges.

He said: “We think we have a pertinent issue that we need to seriously consider very urgently. So, we will engage operators on how we can best address the issue. We as Macra also expect charges to go down.”

The 2020 Inclusive Internet Index, which assesses Internet affordability, relevance of content and readiness, ranks Malawi 97th out of 100 countries. Malawi ranked 52 out of 61 countries in Internet affordability.

On the other hand, the 2018 Malawi Population and Housing Census indicates that only 13.8 percent of the population uses Internet.

But in a separate interview, Jimmy Kainja, a media and communications analyst based at University of Malawi’s Chancellor College, said data charges are expensive due to high VAT on services and Internet; hence, service providers push these to the end-user.

According to Kainja, the other factor is lack of competition with few service providers in the industry.

He said: “Competition helps to lower prices and it spurs innovation. The winner in this case is the end-user. It is then not surprising that International Telecommunication Union ranks Malawi in 167th place out of 176 countries on its ICT Development Index.”

As to what can be done, Kainja said ensuring affordable Internet is a matter of policy and government is responsible for ensuring such.

In December last year, a Malawi Economic report by the World Bank, cited high taxation as one of the major factors leading to exorbitant Internet charges.

Macra is the third statutory corporation Kazako has toured since being appointed minister, having visited MBC and Malawi Posts Corporation last week.