Malawi government hints at use of MSB sale proceeds
Malawi government has engaged the African Development Bank (ADB) to assess the possibly of setting up an Agriculture Cooperatives Bank and to probably provide technical expertise no how the financial institution can be formed using proceeds from the sale of the Malawi Savings Bank (MSB).
The development follows government’s decision to relinquish 75 percent of its stakes in the former state-owned MSB at K 5.4 billion to FDH Holdings.
At a time when the dust, which characterised the controversial disposal of the bank, was just settling, the battle has now shifted to how the state intends to utilise the proceeds which FDH Holdings has already remitted to the Public Private Partnership Commission (PPPC).
Sources within government privy to the matter disclosed that government has already courted ADB officials, who have helped in the setting up of similar financial institutions in other African countries such as South Africa.
Meanwhile, our sources say officials from the ADB are expected in the country early next month.
“African Development Bank officials are expected in, latest, by first week of September and will be looking at the feasibility of setting up a cooperatives bank and will also provide technical expertise on how it can be started using finances from the proceeds realised from the sale of the MSB,” disclosed the source.
Finance and Economic Planning Minister Goodall Gondwe confirmed the coming of the ADB team in an interview on Friday.
He, however, maintained that government had not yet decided on how the money from the sale would be used and that the Agriculture Cooperatives Bank was just one of the many feasible proposals on government’s table.
“The Malawi Savings Bank was a public facility and government is looking at the possibility of returning the money from the sale to the public and we believe setting up the bank will be the best way of ensuring that the proceeds are still in the public’s hands,” Gondwe said.
Smallholder farmer cooperatives, he indicated, would have full control of the bank and that government would not have any shareholding in it.
“I met officials from the ADB in Abidjan, Cote d’Ivoire, sometime this month who agreed to come and look at the possibility of setting up such a facility,” said Gondwe, questioning, “It has happened elsewhere, why not here?”
Gondwe also confirmed that FDH Holdings had paid government in full and that the money was in the hands of the PPPC.
“Such proceeds need some serious thinking and we would like the money to remain at PPP for some time,” he said.
Ever since government sold MSB, various stakeholders, including the Civil Society Agriculture Network (Cisanet) and Road Transport Operators have come up with various proposals on how the money can be used.
Executive Director for Road Transport Operators Association (RTOA) Chrissy Flawo called upon government to use the money on unfinished road infrastructure.
On the other hand, Cisanet in a statement suggested that the money should be used in improving the learning conditions at Bunda College campus of Lilongwe University of Agriculture and Natural Resources (Luanar) which it says is in an appalling state.
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