Hon. Folks, the hullabaloo that ensued after the sudden sale of Malawi Savings Bank (MSB) to FDH Financial Holdings, though expected, still baffles me. There is no denying that President Arthur Peter Mutharika deserves bashing for it but it appears his critics have not stalked the right reasons for it.
By an Executive order, APM halted the sale of MSB, arguably the third largest commercial bank in Malawi in which government had virtually 100 shareholding.
Apparently worried by opposition threats not to pass the 2015 budget if government went ahead and sold MSB, APM pulled a James Bond stunt to get out of trouble by bruising the egos of his enemies.
He issued a mid June directive, suspending the sale and instead inviting various stakeholders to a discussion on the way forward, thereby creating an impression that the future of MSB would have to be collectively determined.
Many hand-clapped and some started attending the round table discussions on MSB. On its part, Parliament pushed the MSB issue to one of its committees from where a no-sale stand quickly emerged.
The significance of the no-sale stand was not clear, though. Was it meant for the House to adopt or for government to follow? Where did that leave the public debate on MSB which was going on at the same time?
It should be noted that the focus of the public debate was not much on whether or not to sell MSB, but rather on the lack of transparency and accountability in the whole MSB saga.
While politicians and some civil society leaders put much of their focus on the K6 billion toxic assets on MSB’s balance sheet as a result of loans to Mulli Brothers and other businesses with strong political connections to Democratic Progressive Party (DPP), economic experts at the first public debate tempered that with the need for the troubled bank to raise an extra K17 billion or face closure.
If this fact was not known to the parliamentary committee as it made the no-sale decision, then it should serve as a reminder that access to correct and adequate information is crucial to the making of informed decisions by various stakeholders in our democracy.
But if all the information about MSB was there and the committee still thought it wise that government should use our hard-earned money to run a bank when education, health, security and infrastructure could have done with more funding, then we have a reason to worry about the calibre of people in the committee.
Then two things happened while the so-called MSB debate had not been taken to its logical conclusion. First, leaked unaudited data showed that MSB realised a pre-tax profit of K2.5 billion in five months.
Instantly, the no-sale stand gained currency. The argument was that it made little sense for government to sell a profitable bank. Maybe this was being said in reaction to the initial offer by the investor of K4.5 billion.
I would like to believe that the folks who wanted to see the offer price hiked were assuaged when the bank was sold at over K9 billion. After all, the investor still shoulders the burden of raising the money needed for recapitalisation.
But it is the misplaced concern of some of those still unhappy with the transaction that baffles me. Take MCP president Lazarus Chakwera, for example. He threatened unspecified consequences for Executive arrogance in disregarding the views of Parliament on MSB.
Likewise, the Public Affairs Committee (PAC) protests that APM was not acting in good faith by allowing the sale to be concluded while the debate on it was still going on.
My take is that while the public is justified to bash APM on MSB, the issue should not be that he let the bank be sold behind our backs. Rather, it should be that he interfered with a due process by halting the sale too late, and his action could have had far reaching consequences on the economy.
APM halted the sale in June while his government was fully aware that the central bank gave MSB a December 2014 deadline to recapitalise or face closure. Any time after that was for RBM to act, not the shareholder to sit down properly and discuss the matter with other stakeholders.
By his action, therefore, the President risked having MSB closed, a development that could have probably sank the economy. Alternatively, APM could have stopped RBM from closing MSB.
That move would have signalled a policy shift back to the Bingu days when the Executive regulated the monetary policy. Using double-standards to keep MSB afloat could have eroded the confidence of various players in the financial sector in RBM.
In addition, it would have probably been the last nail on the coffin of Malawi’s creditworthiness in international trade.
Why all this is ignored and instead, our leaders froth and foam at APM for rescinding his bad decision to halt the sale and open a debate is beyond my comprehension. Or could it be that the sale is wrong just because the opposition did not endorse it?