Government hides the truth

If you go to one demonstration and then go home, that's something, but the people in power can live with that. What they can't live with is sustained pressure that keeps building, organisations that keep doing things, people that keep learning lessons from the last time and doing it better the next time.
Noam Chomsky

Power is a drug on which the politicians are hooked. They buy it from the voters, using the voters' own money.
Peter Newman


The Mhlako Triumvirate

Thursday, March 3, 2011


A new NATIONAL oil company is in the planning stage. Government has advised that it has already registered a company. Alarm bells are ringing in my head.
Our state-owned companies have not exactly shown themselves to be efficient. Why should we consider that a National Oil Company (not sure of the exact name) would be up to its task of purchasing strategic stocks of fuel? The existing state-mandated Oil Importers, a semi-monopoly, is struggling to find the forex to pay cash for fuels and is trying to negotiate 30 day credit terms with its suppliers – this at a time when oil prices are rising rapidly as a result of speculation financed by cheap money created in USA by Quantitative Easing and disruptions or fear of further disruptions of supplies from the Middle East and North Africa caused by the ongoing ‘revolutions’.  If we cannot find the forex to keep pace with daily demand by buying in small lots, sufficient for just a few days, what arrangement will be made to finance the purchase of an EXTRA 30 days’ strategic stockpile? Where will the finance come from and who will benefit from any concessionary funds that some generous donor may come up with? Or, if there is a foreign investor, who will be the local partners?
Will the development of the National Oil Company follow the path taken in the establishment of the National Bus Company some 3 years ago?
The Privatisation Commissiont, the government agency tasked with selling state companies, was amazingly given the job of forming a new state company. I questioned the Commission about this apparent change in statutory function and other issues relating to the formation of the company. I was unable to ascertain the full facts but understood that there would to be favourable terms available to assist either in the financing of the business or to facilitate the importation of vehicles/equipment. This was to be a public/private partnership, that is with government shareholding, to promote participation by indigenous Malawians (an unconstitutional provision.). 
A consortium of local businessmen made a proposal to the Commission and the MALAWI Bus Company was formed. Government was  to have been a shareholder. Strangely enough, Axa Bus Company, already successfully operating a modern and growing business, which had been part of the original consortium found themselves mysteriously removed when the agreement was in its final stages.
Surprisingly, Government dropped out and left the entire company in the hands of the current shareholders, saying that it was no longer necessary for it to continue as a participant. 
I sent a reporter to the Privatisation Commission to ascertain the new owners. The printed list given to the reporter was populated by eminent members of the Mhlako* elite. (Sorry Mr. Katsonga, you were born in the wrong district!) One name unusually missing was Mulli. The reporter asked specifically whether Mulli was involved. The question was met with outright denial. The following day I saw in a local newspaper a report of an interview with the new bus company chairman –  Mr. Mulli! Here was a state agency facilitating the formation of a company that benefited a very identifiable group. The name MALAWI was no longer appropriate/legal. The company changed its name to NATIONAL.
When our President talks about ‘empowerment’ he is talking, apparently, about a cabinet policy referred to in the Privatisation Commission’s Annual Report of 2008 (I think). The Privatisation Commission, in spite of many written requests, steadfastly refused to divulge to me the details of the cabinet policy which they used in establishing the bus company. It is not hard to discern that this is a Black Economic Empowerment Policy which excludes white-skinned citizens such as me - contrary to our non-discriminatory Constitution. It is becoming increasingly apparent that Government’s idea of Black Economic Empowerment favours a select group of Mhlako luminaries.At least, that is now the common perception.
Notice that almost anything ‘up for grabs’ is regularly ‘grabbed’ by Mulli Group. Check out  the acquisitions that the Group has made since Bingu became president. And they continue.
There is no local business that can finance such a rate of acquisition without special favours such as preferential access to finance where potential lenders may feel that they are under some pressure to extend finance when normal banking standards would preclude it. Or, perhaps, where Government has a say in its operations. Is it possible that they are high on the list as favoured local partners for incoming investements? Facilitators.
Watch the development of our new National Oil Company. Note that it starts out with the word NATIONAL and not MALAWI which may indicate that another Public/Private Partnership will be (or has been?) formed. Will this, too, use state facilitated favours to benefit a select group? And will government suddenly pull out?
I asked questions about Muluzi’s wealth when he was in power – he lost Keza after he lost his job. When the present grouping falls from grace, as eventually it will, its downfall could be rapid and disastrous - maybe big enough to bring down one of our banks. The apparent business magic of rapid growth will die a painful death.
Note: *Mhlako – the name used for the President’s Lhomwe tribal grouping.
As a footnote:
The law now allows for the establishment of credit-rating agencies but refuses to licence any of the applicants stating that government must have a 20% shareholding because the nature of the information that they will hold is sensitive and cannot be trusted to a purely privately owned business. That sounds very strange to me. I would not want my information made available to a government shareholder.
Frankly – this STINKS! Is Government using its muscle to get their fiends (meant to say 'friends' but I'll leave it as it is) inside? Let us see how this affair unfolds. Let the businesses under pressure to relent tell us what is really going on behind the scenes.

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