Why the MTL Sale Smacks of Dishonesty

It beats all stretches of imagination why Government has stuck to its guns to let the Malawi Telecommunication Limited (MTL) go.
This other day while on his way back from Tanzania the country’s first Citizen Bingu wa Mutharika was adamant, declaring that the Breton Woods Institutions had no part in the sale.
I am sorry that I have chosen to differ with the head of state because I have information, which clearly points to several disturbing facts.
Lets look first at the fact that the MTL sale is not built on the spirit of competition, and that there has been a lot of arm-twisting by the IMF and World Bank on it.
It all started in the early eighties when a largely ignorant Malawi government launched a chain of structural adjustments throughout the eighties. This, in effect was a nod to the conditionalities attached to the assistance they sought from the two international financial institutions after experiencing a number of external economic shocks.
Forced by economic desperation the government in 1987 introduced what it christened ‘SAP’, or the Structural Adjustment Programme, which was supported by the IMF under what it called the Enhanced Structural Adjustment Programme.
This was followed by two World Bank operations, the Industrial and Trade Policy Adjustment Credit (ITPAC) and the Agricultural Sector Adjustment Credit (ASAC). These, plus several others like the MPRSP – though Government claimed motherhood and responsibility, it never boldly came out in the open to state that it was all sired by WTO politics which desires offspring like the dreaded trade “liberalisation” and all that.
It was no wonder then that the World Bank and the IMF were in attendance to the creation of the Privatisation Act right from the time it started in March 1996. The Bakili Muluzi cabinet even adopted the Divestiture Sequence Plan in 1997, which comprised a list of companies to be privatised.
The rationale behind privatisation was to foster increased efficiency in the economy as well as competition and also to reduce monopoly in the economy. It was also to promote participation by the Malawi public in the enterprises and subsequently raise revenue for the government.
Surprisingly, all that which is desired to be achieved after the privatisation of MTL was already being achieved. It is a viable, profit making public enterprise and, with a whopping 2,400 employees; it is also one of the major employers in the country.
Privatisation in this case will be a means to inflict mass dismissals in the guise of retrenchment – and a lot the already penury stricken country folks will be denied opportunities and livelihood support.
One of the country’s civil society institutions, the Malawi Economic Justice Network argues that in a proper and more logical investment climate the World Bank should have supported any reputable investor to compete with MTL and bring greater competition and not to demand the sale of the entity.
In the final analysis, Malawians are to lose K6.3 billion annually in revenue if Government is allowed to go ahead with the sale of the company. Just between 2002 and 2004 government embarked on a massive telecommunication Phase 1 and 2 expansion project totalling over US$200 million. Buildings, fleets of vehicles and a 40% shares in Telecom Networks Malawi Limited (TNLM) which is valued at US$10 million.
The law governing the Privatisation of national enterprise states that each transaction be fully transparent to the public. Up until now government is failing to tell the Malawians why the company is going at a mere MK3.8 billion when it has assets in excess of MK7.6 billion. Tell me if this is transparency.
A friend of mine who is a financial and economic reporter once told me that a Head of state of any country where privatisation is taking place gets a 10 percent cut out of any transaction. Is this what this is all about?
Bold tidings wouldn’t you say? Perhaps we could safely say all those involved in the sale, the PC, PCL, Parliament and the Executive and the Breton Woods Institutions are aware of something Malawians don’t know? What is it and how will it affect us in the long term?