Govt pays off MPS’ loans

Lesotho Times - - Front Page - Billy Ntaote

THE govern­ment has paid M32 mil­lion to First Na­tional Bank (FNB) which mem­bers of the Eighth Par­lia­ment still owed the in­sti­tu­tion when their term of of­fice pre­ma­turely ended in March this year, the Le­sotho Times can re­veal.

The leg­is­la­tors qual­i­fied for M500 000 in­ter­est-free loans from the bank as part of their ben­e­fits, and were sup­posed to re­pay the money over five years. The govern­ment un­der­wrote the loans and also paid in­ter­est on be­half of the MPS.

The Le­sotho Times has since es­tab­lished of the 120 MPS, only Prime Min­is­ter Pakalitha Mo­sisili and his pre­de­ces­sor, Thomas Tha­bane, did not take the loans.

How­ever, af­ter Le­sotho went for early elec­tions in Fe­bru­ary this year, the MPS re­quested govern­ment to write off the debt, ar­gu­ing they no longer had an in­come to ser­vice the loans.

Ac­cord­ing to sources privy to the mat­ter, the MPS re­ceived their last salaries in March.

The Min­istry of Fi­nance, the sources added, then paid M32, 229, 284.92 mil­lion to FNB on 27 April, and in­vited in­di­vid­ual MPS to dis­cuss how they would re­pay govern­ment the money.

How­ever, the min­istry is only said to have en­gaged “a hand­ful” of the MPS be­fore aban­don­ing the ex­er­cise.

The Le­sotho Times has also es­tab­lished that for­mer En­ergy Min­is­ter and Le­sotho Congress for Democ­racy (LCD) MP Ti­mothy Tha­hane, and LCD MP Le­bo­hang Ntsinyi, were the only ones who cleared their loans be­fore govern­ment de­cided to pay-off FNB.

Govern­ment, the Le­sotho Times has also es­tab­lished, has again guar­an­teed new M500 000 in­ter­est-free loans taken by mem­bers of the cur­rent Ninth Par­lia­ment from Ned­bank, and re­mains mum on the pre­vi­ous debt.

One of the MPS told the Le­sotho Times on con­di­tion of anonymity: “We are still wait­ing to hear if govern­ment has writ­ten-off our debt from the Eighth Par­lia­ment be­cause we have since taken more in­ter­est-free loans as mem­bers of the Ninth Par­lia­ment.

“The only de­duc­tions tak­ing place are for th­ese lat­est loans and not from the pre­vi­ous par­lia­ment. From what I hear, we are not go­ing to re­pay the re­main­der of our loans from the Eighth Par­lia­ment be­cause some of the MPS no longer have an in­come and in any case, it was not our fault that par­lia­ment could not last its five years. The rea­son why we could not fin­ish our five-year terms was be­cause govern­ment col­lapsed, and this had noth­ing to do with MPS but the lead­ers, Ntate Tha­bane and his deputy, Ntate (Mo­thetjoa) Mets­ing.”

Con­tacted for com­ment, the of­fice of the Min­is­ter of Fi­nance re­ferred the Le­sotho Times to the min­istry’s Di­rec­tor of Pub­lic Debt, Kam­pong Tšolele, who con­firmed govern­ment cleared the MPS debt “in line with the Loans and Guar­an­tees Act 1967 and Statu­tory Loans Act of 1975”.

Ms Tšolele ex­plained: “The reg­u­la­tions ba­si­cally say where we have is­sued a guar­an­tee, and the bor­rower fails to pay, we should in­ter­vene by clear­ing the debt. How­ever, the law is silent on how govern­ment should re­cover the debt. This is why we need a com­pre­hen­sive Bill to fill the gaps left by le­gal in­stru­ments used to guar­an­tee such in­ter­est-free loans.”

Ms Tšolele also con­firmed the MPS were writ­ten let­ters dated 26 May 2015, in­form­ing them about govern­ment’s de­ci­sion to clear the FNB loan.

“The min­istry paid the bal­ance of M32, 229, 284.92 on 27 April 2015 through the Cen­tral Bank. How­ever, this amount did not cover Ntate Tha­hane and Ms Ntsinyi as they had set­tled the debts on their own be­fore govern­ment could step in,” said Ms Tšolele.

“I should also point out that govern­ment is yet to make a de­ci­sion on this is­sue. We are still wait­ing to hear if the loans were writ­ten off or the MPS would be made to pay.”

Dr Tha­hane con­firmed pay­ing off his debt “as it was the moral thing to do” as it had noth­ing to do with govern­ment.

“I de­cided that since it was my per­sonal debt, then I should re­pay the money. Govern­ment was as­sist­ing with the in­ter­est only, and the rest was my re­spon­si­bil­ity. I could not let my bur­den be turned into govern­ment’s prob­lem as I was the ben­e­fi­ciary of this fa­cil­ity,” Dr Tha­hane said.

The Speaker of the Eighth Par­lia­ment, Sephiri Motanyane, said the MPS were promised their loans would be writ­ten off should they agree to par­lia­ment’s dis­so­lu­tion.

“The MPS owed dif­fer­ent amounts when par­lia­ment was dis­solved, but they are all go­ing to ben­e­fit al­though un­equally,” Mr Motanyane said.

On his part, BNP deputy leader, Joang Mo­lapo said he was still wait­ing for govern­ment’s fi­nal de­ci­sion on the is­sue.

“I had paid M261, 000.00 of the loan, and my ex­pec­ta­tion was that I would only be al­lowed to bor­row this amount in the Ninth Par­lia­ment since I still owed M239 000. But I have been told I can still bor­row M500, 000 from Ned­bank this time. My feel­ing is the loans are fun­da­men­tally wrong as MPS cre­ated them for their own per­sonal gain.

“One can­not be a ref­eree and a player at the same time, but this is what hap­pened when the loan scheme was es­tab­lished.

“There should be a neu­tral body that de­cides proper ben­e­fits for MPS. We al­ready have very at­trac­tive ter­mi­nal ben­e­fits as MPS, with­out con­tribut­ing any mean­ing­ful amount to­wards the gra­tu­ities. The en­tire sys­tem is un­sus­tain­able and should be re­viewed.”

Chief Mo­lapo fur­ther said as the op­po­si­tion, they would wait to hear what the govern­ment would say re­gard­ing the loans.

“It’s up to govern­ment now; what I can only say is we ex­pect those in power to act re­spon­si­bly be­cause th­ese are pub­lic funds we are talk­ing about,” said the for­mer home affairs min­is­ter.

Con­tacted for com­ment, Com­mu­ni­ca­tions Min­is­ter Khotso Let­satsi said he did not know any­thing about the loans, but promised to “find out”.

MIN­IS­TER of Fi­nance, Dr Mam­phono Khaketla

Min­is­ter of Fi­nance Dr. ‘Mam­phono Khaketla.

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