K15.3BN Rental Arrears Choke Govt | The Nation Online

K15.3BN Rental Arrears Choke Govt | The Nation Online

Government owes private landlords K15.3 billion in arrears, putting its departments and agencies which operate from rented properties at risk of eviction.

Minister of Lands Kezzie Msukwa confirmed the development in an interview on Friday pointing out that the arrears are a result of years of non-remittance of rentals.

capital hill | The Nation Online
Part of additional office space at Capital Hill

He explained: “The bad thing about the arrears is that sometimes the property owners take you to task and demand interests and that has a negative impact on government coffers because you pay more.”

But Msukwa has expressed hope that government will soon start clearing the arrears, most of which were inherited from the Democratic Progressive Party (DPP) administration.

“We are auditing all government institutions that owe arrears. Government allocated K200 billion to offset arrears, but before that we need to establish if these are genuine arrears,” he explained.

In the just-ended sitting of Parliament, Msukwa unveiled the ministry’s plan to construct more offices at Capital Hill, the seat of government in Lilongwe.

Presenting his ministerial statement last month, he said: “My ministry has started planning for the construction of at least two additional office buildings on Capital Hill, which will be subject to availability of funds.

“The direction we want to take is to move all institutions to government buildings. This will save us a lot of government resources spent on rent.”

In 2018, government added more office blocks to Capital Hill which Msukwa has said is helping it save millions of public funds.

“The completion of offices at Capital Hill helped relocate ministries of Gender, Labour and Statutory Corporations to Capital Hill and in the process saving us around half a billion kwacha per annum,” he said.

Msukwa, in an interview, further disclosed that property holding company Mpico Limited is owed a big chunk—about K8 billion.

Meanwhile, economic expert Ben Kaluwa has said government’s delay to honour payments, has “severe implications” on local businesses.

“Government owes some firms arrears that date back to 20 years. How can businesses flourish when their money is being held for ages?” he queried.

Kaluwa, a lecturer at University of Malawi’s Chancellor College, has since urged the country to adopt a 30-day rule that invoices for small-scale businesses be paid within a month.

“We need to adopt this rule and enforce it. The ones who break it must be imprisoned. In countries like the United Kingdom, no one can hold payment for more than 30 days without facing imprisonment,” he said.