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Parliament this week warned the executive that they risk damaging relations with the legislature if government launches and disburses the K1 billion loan scheme without the House’s approval.
Parliament has also revealed that the loan scheme will use funds that were put in the dormant account at the Reserve Bank of Malawi (RBM).
Budget and Finance Committee chairman Ted Kalebe explained in an interview in Mangochi on Tuesday that dormant account funds are either left-overs from a capital project or money given by a donor for a particular use but later frozen into this account because government failed to meet agreed conditionalities.
“Being in the dormant account does not mean government has the right to use the money the way it wants it,” explained Kalebe.
He argued that government has to go back to Parliament to seek authority for the use of the funds because this money was in the first place voted for and agreed to be used for a certain purpose.
Kalebe said it was Finance Minister Goodall Gondwe who told the committee that the K1 billion fund will be drawn from the dormant account.
This was during a meeting the committee had with Gondwe mid-December last year.
President Bingu wa Mutharika, who made the loan scheme his election campaign agenda, is expected to launch the Fund this Saturday, January 29.
“I hope that they are launching it not necessarily to start using the funds because that will mean undermining the authority of Parliament and this will be very bad for the relationship between Parliament and the executive,” said Kalebe.
He urged government to wait for Parliament approval and advised the executive to call for Parliament to discuss the scheme if they are in a hurry to utilise the funds which he stressed are available at RBM.
Kalebe also pointed out that the K1 billion was not incorporated in the 2004/05 budget hence its expenditure is illegal.
“If we [Parliament] don’t sanction this expenditure, who will government be accountable to? Are we instilling discipline in the chain of command then? Is this prudent management of resources?” Kalebe queried.
He said if government goes ahead spending the funds, the committee will table the issue to the whole House and decide the way forward.
Kalebe warned that Parliament could even summon Mutharika to explain why he contravened the law and approved expenditure outside the budget which is the legal document.
He said his committee wants to change the mind-set of government and MPs so that they respect the authority of Parliament.
“It is high time parliamentarians began to think of themselves as representing the people, not political parties. The moment we think of ourselves as parties, things are not going to improve in Malawi,” he said.
Kalebe said the committee fully subscribes to the ideal of having the credit scheme but said it wants some order and discipline when managing public resources.
But Information Minister Ken Lipenga said earlier this month that government will proceed with the loan scheme because there is no legal requirement that stops its enforcement.
“We have consulted the Attorney General and the Ministry of Justice on this and we don’t need approval from Parliament on the matter,” said Lipenga.
He said people are “itching” to access the loans and that government is not going to wait.
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