Troubled subsidy

By Alick Ponje

The launch of the Decent and Affordable Housing Subsidy Programme (Dahsp) in 2014 was received with mixed reactions with some stakeholders positing the initiative would not really achieve its larger objective.

In a way, the programme is supposed to be revolving in nature, where beneficiaries repay half of the total cost of constructing their ‘decent’ houses.

Today, we understand that out of the K6.3 billion which was supposed to be collected under the programme, only K148 million has been reclaimed, representing a recovery rate of 2.3 percent.

A total of K12.6 billion was set aside to help poor Malawians in 193 constituencies build decent houses.

When launching the programme, then-president Peter Mutharika said adequate and decent housing is a catalyst for development and one of the requirements for sustainable livelihoods.

“It is, therefore, a given fact that lack of adequate housing compromises development and eventually leads to the escalation of many social ills that usually arise from homelessness,” Mutharika said.

It, however, later transpired that the programme became unsustainable due to the high default rate.

Last year, the Tonse Alliance administration suspended the housing programme, citing rampant abuse.

Secretary for Lands Bernard Sande Thursday told the Local Authorities and Rural Development Committee of Parliament that loans for the beneficiaries were due to different times, but that most of the loans are expected to mature by 2024.

Sande claimed some beneficiaries of the loans were “deliberately failing to pay back the loans due to political interference” apparently with some politicians misleading the people that they did not need to repay the loans.

Now the parliament committee wants Dahsp, which reached out to at least 37,781 beneficiaries between 2015 and 2019, to be completely phased out.

According to its chairperson, Horace Chipuwa, the outstanding loans have to be recovered, still.

“The committee will try to lobby for an allocation in the budget so that, when budgeting for the next year, they should include an item for them to use in recovering the loans,” he said.

Out of the beneficiaries who were reached out in the programme, 22,440 have had their house fully rehabilitated while others are still waiting for materials to complete rehabilitation works.

With the suspension of the programme and the likely phasing out of it altogether, means several resource-constrained households will not acquire the maximum 30 corrugated iron sheets of 29/30 gauge of 10 feet each and a maximum of 30 bags of cement of 50 kilogrammes each and related building materials.

Chipuwa insists government has to dump the project after recovering the outstanding loans, even though there are doubts the recovery will be successful.

Without the reported abuse, 68 households per constituency would have had their houses r e h a b i l i t a t e d every year with 63 of them on loans and five on grants.

“We are not impressed with the programme. In fact, the programme was not well set. So, it was a problem from the onset and now for them to improve on it, it is very difficult. We are encouraging government to collect the money and change the programme. That one is dead,” Chipuwa said.

In the actual programme, there is the loan recovery component but there has been no funding for the exercise, apparently.

In the meantime, failure to recover the loans has affected other people who cannot access their allocations while other houses have not been completed.

The grants were reportedly not disbursed due to financial challenges.

In all the Dahsp transactions, there have been clear elements of confusion and failure to strictly follow public finance management guidelines.

At one point, there were concerns that substandard building materials were supplied to beneficiary households.

Not much happened to those who did the ‘criminal’ acts.

And many more stakeholders want the loans to be recovered and important lessons to be learnt from how the programme has progressed.