Whose interest is govt selling Airline shares?

During Bakili Muluzi administration, government, under the ill-advice of the International Monetary Fund (IMF) and World Bank indiscriminately sold state-owned companies to the private sector in return for financial assistance. All strategic parastatals that were assisting government in national development were sold off to the private companies, some of which were foreign-owned.

After much public criticisms, there was a shift in government economic thinking during Bingu Wa Mutharika presidency. Privatisation programme was abandoned and government opted for public private partnerships (PPPs). The public private partnerships commission, formerly privatisation commission, has been involved in negotiating government joint-ventures with prospective partners.

Air Malawi is one of the very few government companies that survived privatisation during the troubled days of Muluzi. A lot of Malawians resisted offloading the company to the private sector. However, government liquidated Air Malawi and formed Malawian Airlines and looked for a strategic partner for the joint-venture. These efforts have materialised after government identified Ethiopian Airlines. The Malawi government owns 51 percent while Ethiopian Airlines owns 49 percent.

However, the shareholding structure in the airline leaves a lot to be desired. It is inconceivable that government wants to be a minority shareholder in the airline with only 20 percent shares while 31 percent will be sold to the public. Does this not sound like another Kayelekera mining agreement? Why should government have the least shares when it needs more resources for development projects? And why sell shares to the public? One would have expected government to inject in more money in the airline and buy all the shares 31 percent so that it has 51 percent and hold them on behalf of the people. In whose interest is government selling 31 percent shares? In these economic difficult times when government officials are desperate and running around like headless chickens looking for money such ventures should be utilised to the fullest.

The rich few Malawians (many of whom may already have shares in other companies) will buy these shares. The sale of shares to the ‘public’ is therefore giving undue advantage to rich people to get richer at the expense of the poor.

Hearing sentiments from the private sector, looking at the composition of the cabinet, Malawi Airlines board members and economic advisers, and the operations of the Public Private Partnerships Commission it is evident that government is misled and ill–advised by a few Malawian who represent western capitalists and are still trapped in the much-discredited neo-liberal thinking that government should take a background role and let the private sector be the engine of development. .

Many companies are making billions in profits, but they are not investing the resources in tangible assets. They would have been investing in low-cost housing projects, huge shopping malls (not the tiny Chichiri or Lilongwe), manufacturing industries and other projects across the country. They are not doing not doing enough!

They should learn from countries like Kenya, South Africa and Zambia where the private sector is really assisting government in development efforts. For example, taxi operators in South Africa pulled their resources together and started their own airline and in Zambia three individuals combined their resources to form the Zambian Airways. Can Malawians fail?

Government should rescind its decision to sell the public the shares. The joint-venture with Ethiopian Airlines, which is 100 percent owned by the Ethiopian government, should be utilised to the fullest in the interest of all Malawians. The government stands to gain from this collaboration because Ethiopian Airlines is one of the three biggest and most efficient airlines on the African continent apart from Kenyan Airways and South African Airways.