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 LesothoTimes 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 LesothoTimes 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 LesothoTimes 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 LesothoTimes 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 LesothoTimes 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 LesothoTimes 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”.