The Centre for Democracy and Economic Development Initiatives (CDEDI) says taxpayers’ funds invested in joint ventures such as Malawian Airlines are only benefiting very few civil servants and politicians while millions of Malawians continue facing dehumanizing poverty.
Addressing the Press in Lilongwe, CDEDI Executive Director, Sylvester Namiwa, said it was important for responsible authorities to update Malawians on suspicious deals surrounding the operations of Greenbelt Authority (GBA) as well as Malawian Airlines.
Namiwa has, thus far, challenged the Malawi Government, through the Minister of Finance and Economic Affairs Simplex Chithyola-Banda to set up a special purpose vehicle with clear terms of reference (ToRs) and targets to recover public money which has been fraudulently stashed in some individuals’ pockets and business ventures.
He said the call is as a result of ongoing findings that have shown that most of the joint ventures entered into through Public-Private Partnerships (PPPs) neither declare dividends nor make public their annual reports, let alone contribute equity funds as expected.
Namiwa has revealed that demonstrating the worst-case scenario is the fact that some people entrusted to run these ventures are turning public funds, sourced through loans guaranteed by government, into personal shares.
“This is daylight robbery which must be checked forthwith,” he said.
The CDEDI Executive Director has also requested for action from government on its 49 percent stakes in Malawi Airlines in which Ethiopian Airlines has 51 percent shares.
He said it is worrisome that just like what is happening at Greenbelt Greenhouse Limited, dividends from the joint venture between Ethiopian Airlines and Malawian Airlines were not made public.
“Failure to declare dividends begs the question as to how Malawians are benefiting from this arrangement,” said Namiwa.
He noted that Ethiopian Airlines did not register the airline code for Malawi and instead opted to use ET as the flight code for Malawian Airlines.
According to Namiwa, this systematic ‘anomaly’ allows Ethiopian Airlines to receive all air ticket money from travel agents across the globe, who sell tickets on behalf of Malawian Airlines.
“Consequently, Malawi Airlines does not know profits, or losses, that Ethiopian Airlines makes. Further, it should be noted that once that money is obtained by Ethiopian Airlines, it is subjected to a 10% collection fee, something that would not happen if Malawi Airlines had its own flight Code, say MWW. All the money would come to Malawi Airlines account,” he highlighted.
He said another interesting aspect of the contract is that all aircraft belong to Ethiopian Airlines and operate as Malawi Airlines on lease.
“The lease fees are determined by ET itself. Thus, ET deployed an engineering team to Malawi, which services the aircraft at very exorbitant monthly fees paid to ET. Ethiopian Airlines also receives management fees for operating the airline. The rate was determined by Ethiopian Airlines itself at the start of the company in 2014, and this rate keeps changing every year. Management fees, just like engineering fees, are paid in US dollars, and this is not small money,” he said.
He has expressed fears that in the event that there is termination of contract, Malawi will be left without any air craft yet the money realised over the period would have allowed Malawi Airlines to acquire more than two of its own aircraft.
“However, Ethiopian Airlines would not in any way willfully do this as it will cut significantly the colossal money it realizes through aircraft leasing,” said Namiwa while expecting regular updates and transparency in the setting up of the special vehicle to monitor the operations of the said joint ventures.
CDEDI has since penned the office of Attorney General to facilitate the process of making public the amount of money Ethiopian Airlines brought on the table as their equity contribution.
The organisation is also requesting the amount of profits that have been declared so far.
As if that is not enough, CDEDI on behalf of Malawians, has also requested for an explanation with evidence as to what Malawi has benefited from this venture, apart from the prestige of being seen to own an airline when it has none.
CDEDI still reiterates its position that the current GBA Chairperson Wester Kosamu should be relieved of his duties to ensure seamless clean-up at GBA, since all this mess is coming to light under his watch.
