Mps exposed on perks

Legislators—apart from pocketing a one-off K12 million subsidy in the K24 million personal motor vehicle loans from banks—are also forcing the taxpayer to cough around 72 percent of interest on their credits, Nation on Sunday investigations show.
The interest subsidy translates to an additional freebie north of K18 million per legislator over the 54 months repayment period, bringing the total hand-out to K30 million when the K12 million honoraria part of the ‘loan’ deal is added.
Over the payback time, the interest cushion amounts to K3.5 billion for all the 193 MPs based on the 35.5 percent interest rate that Malawi Savings Bank (MSB), where around 65 legislators got the loans, for example, has charged for the facility.

 
On the other hand, the K12 million honoraria have already cost taxpayers roughly K3.2 billion—bringing to K6.7 billion the total burden to the taxpayer.
According to the list of those who got loans from MSB in July, each of the legislators received K24 million, which is more than triple the K7 million facilities that legislators from the previous Parliament enjoyed.
Malawi Congress Party (MCP) president Lazarus Chakwera—whose political grouping wants all Cabinet ministers fired for allegedly asking to have their perks increased—is one of those who got the facility from MSB.

 
Based on MSB calculations that we have seen, if an MP were to pay back the loan like all ordinary Malawians do without subsidies, the total deductions per month would have been K895 500.22, with K444 444.44 as total monthly principal and K451 055.81 as monthly interest.
Instead, each legislator pays 50 percent of the principal—which translates to K222 222.22—because half of the K24 million loans are honoraria fully paid by government. On interest, the MPs have determined that they only pay 10 percent interest (which translates to K109 293.33 instead of the 35.5 percent (K451 055.81) in the case of MSB—leaving taxpayers, again, clutching the remaining 25.5 percent (K341 762.51) interest tab as subsidy to the lawmakers’ largesse.
Apart from the 65 MPs who obtained the money from MSB, we also have evidence that 97 MPs—including Speaker Richard Msowoya—accessed the facility from Standard Bank in July and August.
And while the alleged demands for pay rise by Cabinet ministers rightly drew indignation from civil society organisations (CSOs) and other stakeholders, the reaction from MCP spokesperson Jessie Kabwila—who described ministers as “insensitive and extravagant” and cannot be trusted with the country’s limited resources—sounds like double standards as she got her own K24 million bonanza heavily subsidised by the poor on July 23 2014.
Furthermore, at least President Peter Mutharika had the opportunity to reject the minister’s request when it was reportedly sent to him for consideration.
But for the MPs’ loan perks, Parliament effected the package without the Head of State’s nod.
In fact, the K24 million packages may be deemed illegal without the President’s endorsement.
The law on National Assembly emoluments reads in part: “The members shall be paid from monies provided for the purpose by Parliament, salaries, fees and allowances in respect of their services at such rate as the President may from time to time by an order published in the gazette authorise”.
But State House press secretary Frederick Ndala said in an interview on Thursday that the President has never received any proposal to review MPs’ perks.
“The President has not received any proposal to review emoluments of our Members of Parliament. We are also hearing it in the media just like anybody else. Please check with the Speaker who is better placed to comment,” said Ndala.
The Speaker said all matters regarding MPs’ emoluments are handled at the Ministry of Finance.
“Until the time Parliament will be independent enough to handle own finances that is when we would be able to answer matters of finance,” he said.
But in a telephone interview on Friday, Ministry of Finance spokesperson Nations Msowoya said the request to seek approval from the President would not have originated from Treasury.
“In a normal circumstance, the request to seek authorisation could have come from the Office of President and Cabinet or Parliament itself,” he said. n