Point of no return
Hon Folks, there comes a time during a plane take-off when an attempt to abort the process can only lead to a tragic crash. Call it a point of no return.
Does the point of no return principle only apply to plane take-offs? APM reminded us on Wednesday that in our own recent history, not just a plane but the whole national flag carrier, Air Malawi, “crashed” when brakes were unreasonably applied to its sale at after it had reached the point of no return.
Ironically, APM was saying this while announcing an executive decision to apply brakes to the sale of Malawi Savings Bank which, like the defunct Air Malawi, is 100 percent State-owned, at what appears to be its point of no return.
The President said the sale of MSB, made on strong technical advice from experts including Reserve Bank of Malawi (RBM), International Monetary Fund, Institute of Chartered Accountants in Malawi and captains of the private sector, has to be suspended because its critics — mainly some in the opposition and civil society organisations — are vehemently opposed to the sale on “political and sentimental” grounds.
This is how APM put it in a statement read by his press secretary Gerald Viola: “Not too long ago, Air Malawi found itself in a similar situation. There were people who strongly opposed inviting a strategic partner in Air Malawi. There were others who saw the need for that initiative.
“We argued, quarreled and rumbled about it. By the time we concluded the transaction, Air Malawi was a mere shell and government ended up with huge debts to settle.”
The tragic crash of Air Malawi as a consequence of dilly-dallying with the sale at the point of no return completely destroyed the State-owned airline. It’s no longer there. What remained was the burden for government to use taxpayer’s money to settle the “huge debts” it left behind.
Elders have no kind name for person who repeats a mistake of the past while expecting to reap different outcomes from it.
Delaying the sale of cash-strapped MSB so we can first “argue, quarrel and rumble about it” isn’t what the President should be championing. Not now after the Air Malawi experience.
APM, or at least the folks in the Treasury, know that government will shoulder the burden of raising over K23 billion cover for the depositors’ funds should the bank crash, the Air Malawi style, as the consequence of aborting its sale to FDH Holdings at this time when the take-off gear had already been engaged.
Right now MPs are busy scrutinising the national budget for 2015/16 and the general picture emerging from the august House is that the K900 billion budget does not meet operational requirements of various ministries and departments.
This may translate into cuts in public service delivery — public hospitals experiencing drug shortages and medical equipment; schools experiencing shortages of teaching and learning materials; and various offices in government and parastatals experiencing shortage of paper, fuel and other resources.
We also know that apart from debts which IMF says are on the verge of rendering Malawi debt-distress, a situation in which default on repayment is most likely, government has already amassed K155 billion arrears to its service providers on which multi-billion kwacha interest is stockpiling.
It doesn’t sound prudent that the government, which is up-to-the-neck in debts, should take additional unnecessary risks with MSB, a bank which is in trouble largely because, according to a recent confession by the Ministry of Finance, Economic Planning and Development, DPP politicians poked their stuffy noses in its affairs.
APM should simply summon courage and meet the MPs in the august House. That’s where the so-called debate on the sale of MSB can expeditiously be carried out by people we entrusted with sovereign authority. That’s also the place where the President can answer any other questions pertaining to the budget in line with section 89(3)(c) and section 89(4) of the Constitution.
As for MSB, we know that RBM gave it a June 2015 deadline to put its house in order or face closure. This is June. It’s too late therefore for APM to suspend the sale of MSB unless he is also ready to use executive powers to stop the regulatory authority from cracking the whip on MSB.
