Lekhetho Ntsukunyane
THE government has written-off the M32 million members of the Eighth Parliament owed when their term of office prematurely ended in March last year, the Lesotho Times can reveal.
The legislators qualified for M500 000 interest-free loans from First National Bank (FNB) 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.
But when the MPs’ term ended halfway following the collapse of the previous tripartite coalition government led by former premier Thomas Thabane and holding of the 28 February 2015 elections, the MPs requested government to write off the debt, arguing they no longer had an income to service the loans. Of the 120 MPs, only Prime Minister Pakalitha Mosisili and his predecessor, Thomas Thabane, did not take the loans.
As a guarantor, the government paid off M32, 229, 284.92 to FNB on their behalf. After making the payment, the Ministry of Finance 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.
Following the bailout, many civil society groups and political party youth leagues expressed outrage over the move, describing the MPs’ loan scheme as “legalised corruption by the elite”.
Whether the government had written-off the debt from the Eighth Parliament had remained ambiguous, with some legislators having since taken more interest-free loans as members of the Ninth Parliament.
This was after the government guaranteed new M500 000 interest-free loans taken by members of the current Ninth Parliament from Nedbank.
However, the government confirms its decision in a savingram dated 27 September 2016.
Signed by Government Secretary (GS) Lebohang Ramohlanka, the savingram partly reads: “At its meeting of Tuesday 27 September, 2016, under “memorandum”, cabinet approved the write-off of the outstanding debt to the members of the Eighth Parliament amounting to M32, 229, 284.92 that the government of Lesotho paid to the First National Bank on their behalf.”
The document reveals that cabinet approved the payment of Fringe Benefit Tax amounting to M21 million for the bailout.
“. . . the government, through the Ministry of Finance, pays the Lesotho Revenue Authority (LRA) the Fringe Benefit Tax amounting to M21, 486, 189.95 that was attracted by paying the amount, in accordance with the tax laws.”
The savingram states that cabinet also approves the refunding of former Energy minister and Lesotho Congress for Democracy (LCD) MP Timothy Thahane as well as former LCD MP and now Ambassador to China Lebohang Ntsinyi who were the only legislators to clear their loans before government decided to pay-off FNB.
“That two members of the Eighth Parliament, namely Dr Timothy Thahane and Ambassador Lebohang Ntšinyi be refunded the amounts they have already paid to the FNB as follows M193, 294.21 and M398, 198.24, respectively.”
Contacted for comment yesterday Ms Ramohlanka confirmed the government’s decision, saying it was reached “a long time ago”.
“The decision to write-off the debt for members of the Eighth Parliament was reached a long time ago. The document you have was just formalising the decision the government took earlier this year,” she said.
In November last year, prominent lawyer, Attorney Tumisang Mosotho, launched an online petition calling for the abolition of the M500 000 interest-free loans given to MPs.
Titled “Lesotho MPs loan scheme is legalised corruption by the elite”, the petition was hosted on the website Change.org and argued the interest-free loan scheme “designed for the sole benefit of Members of Parliament is nothing short of corruption.”
He said the scheme was “against all known basic principles of morality, governance and legality”.
“This means the interest is paid out of taxpayers’ monies and in the event an MP fails on repayments, the capital amount is also paid out of the public coffers.”
The lawyer argued Lesotho could ill-afford the facility given its least-developed country status: “This is happening in a least-developed country where more than half the population lives on less than $1 per day; a country that has the world’s (second) highest number of people infected and affected by HIV/AIDS.”
A group of nine “concerned citizens” appeared before the Senate Petition Committee in February this year and stateted that the government’s decision to pay off the M32 million was “inexcusable” and that the money should be repaid.
Meanwhile, Dr Mosisili has warned MPs seeking his ouster that the government would not write off their interest-free loans in the event of a no-confidence motion against him as was the case with the Eighth Parliament. He said in the Eighth Parliament the write off was made because the decision to dissolve parliament was not made by the MPs.
