MALAWI: Defiant Mutharika's loan scheme provokes opposition

[ This report does not necessarily reflect the views of the United Nations]

LILONGWE, 1 Sep 2005 (IRIN) - President Bingu wa Mutharika plans to go ahead with the distribution of loans to the country's poor from the Malawi Rural Development Fund (Mardef) despite objections raised by parliamentarians.

Parliament suspended the MK 5 billion (US $40 million) loan scheme in June after allegations that Mardef money had largely benefited supporters of Mutharika's recently formed Democratic Progressive Party (DPP).

The opposition Malawi Congress Party (MCP) and United Democratic Fund (UDF) have called for Mutharika's impeachment over the issue.

Furious over the delay in disbursing the money, Mutharika said earlier this week, "If you want to impeach me because of a loan scheme you can go ahead."

Some political observers have warned that Mutharika's resolve to push ahead with the scheme was ill-advised and likely to provide his critics with more ammunition to force him from office.

"It will be illegal for the president to go ahead with the fund without parliamentary approval," noted Alick Msowoya, president of Malawi's Law Society, saying it was imperative that Mutharika follow constitutional provisions before giving the loan scheme the green light.

Rafiq Hajat of the Institute for Policy Interaction commented, "There is no way the president can go ahead with the loan distribution, because parliament made it very clear when the fund was set up that there should be a consultation process in the implementation of the fund."

Soon after assuming power in May last year, Mutharika promised poor Malawians that his administration would set up a loan scheme to enable people to start their own businesses. Mutharika has expressed his frustration with the slow pace of the process since the matter went to parliament.

[ENDS]