The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) says it is worried with the slow pace at which government is offsetting the K157 billion debt it owes the private sector.
MCCCI’s Public Private Dialogue Manager, Hope Chavula, told Business Times in an interview that the Chamber is not impressed with the slow progress of the repayment despite government issuing the promissory notes, saying the process is taking longer than anticipated.
“Those companies borrowed from banks to operate and they are paying interest so something has to be done much faster so that these companies access their resources,” said Chavula.
He further said with the fast depreciation of the Malawi kwacha, at the end the companies may not be able to make profits the longer the debt takes to be repaid.
Finance Minister Goodall Gondwe said yesterday he was not able to give details of where government is in terms of repayment but indicated that government is doing something.
He referred the reporter to Nations Msowoya, the ministry’s spokesperson, who had not yet responded to a questionnaire by the time the story was filed.
Gondwe said in Parliament when presenting the 2015/2016 National Budget that the K157 billion debt will be offloaded in three consecutive financial years through issuance of zero coupon promissory notes for companies to use to access money from commercial banks.
He sa i d the debt was categorized in three basing on maturity of which the first category is expected to mature this financial year worth K50 billion which will be paid as first installment.
But MCCCI’s president, Newton Kambala, described the arrangement as a joke and violation of the principle of partnership which he said completely denigrates the weaker partner (the private sector).
“In any contract of sale, the two parties are deemed to be equal. However, government having acquired and enjoyed the goods and services decided to dictate to the other party new terms post-sale (after the sale already took place),” he said.
Kambala described government’s action as exploitative which, he said, will have an impact on the employees of the said companies owed the money through retrenchments.