Tag Archives: Malawi cashgate

Malawi – former Justice Minister arrested over cash scandal

allAfrica

Cape Town — Former Malawian Justice Minister Raphael Kasambara and a senior civil servant were arrested on money-laundering charges on Monday, report the country’s newspapers.

The Maravi Post said a senior official in the Cabinet and president’s office, Joster Njanji, was also held following a probe into “how millions of dollars were allegedly looted in government in dubious deals.”

The Nyasa Times said five police vehicles arrived at Kasambara’s home at 5.30 am and towed away a car allegedly used in the shooting last September of a former government budget director, Paul Mphwiyo. Kasambara was previously arrested on charges arising from the shooting.

The Times said Kasambara at first refused to admit police to his home but was eventually arrested and taken first to police headquarters, then to a police station.

The Times also reported that Justice Minister Fahad Assani on Sunday told a radio station that there was “overwhelming” evidence implicating Kasamabara in the budget director’s shooting.

The Nation newspaper reported the former minister dismissed his arrest, saying, “It’s a joke of a charge.”

Related story: Banda Battles With Graft  http://allafrica.com/stories/201401272061.html

Donors block $150m in aid over Malawi cashgate scandal

Mail and Guardian

Malawi in middle of $100m ‘cashgate’ scandal

Foreign donors have suspended £150-million of aid until a scandal allegedly involving civil servants, MPs and businesspeople is cleared up.

Malawi's president Joyce Banda, who is allegedly part of the scandal. (AFP)                    
Malawi’s president Joyce Banda, who is allegedly part of the scandal. (AFP)

                                   

Malawi is bracing for the mass trial of 100 civil servants, politicians and businesspeople involved in the alleged looting of more than $100-million from government coffers, a case that has become a litmus test for foreign donors backing the government of Joyce Banda.

The “cashgate” trial is scheduled to start on Wednesday under pressure from donors who bankroll 40% of the government’s budget and who have said they will withhold some aid until it is clear that it is not being misused.

“We are under extreme pressure” to prosecute the cases, says Bruno Kalemba, the director of public prosecutions.

“There are lots of files on my desk that need to be dealt with. There are warrants of arrest and a lot of follow-ups. This has become an emotional issue.”

The pressure for swift action has come from donors, who have suspended pledged aid worth $150-million until Banda, who came to power in 2012 following the sudden death of president Bingu wa Mutharika, “cleans up the mess” of corruption and speedily prosecutes all suspects.

“We will not be able to resume support through government systems until we have a clear assurance, independently verified, that our resources are all being used for their intended purpose,” said Sarah Sanyahumbi, a British diplomat who heads the donor grouping, which includes European countries, the European Union and the World Bank.

Budget Britain has withheld £17-million of budget funds.

The British high commissioner to Malawi, Michael Nevin, says withholding of the aid “is not about punishing Malawi … we want government to put its house in order by implementing systems that will not allow pilferage of public funds.”

The case comes just four months ahead of elections in Malawi.

Some political pundits are hoping that among the suspects some will be bold enough to link the president to the public looting.

Speculation about her involvement has been rife here since the scandal was revealed following the shooting of budget director Paul Mphwiyo in September.

Mphwiyo is reported to have been on the verge of exposing a corruption ring when unknown gunmen shot him outside his home on September 3.

He survived the shooting and went for specialised treatment in South Africa.

Mphwiyo will be the number one state witness during the trials.

Billy Banda, director of rights group Malawi Watch, said: “What Malawians can conclude is that the president’s hands are not clean in this issue … somewhere and somehow the president’s hands are there in this scandal.”

Banda said Malawians would be interested to know how much the president knew about the looting, which her government has blamed on loopholes in the payment system. “There are so many questions that need to be answered.”

Evidence A Catholic rights group has accused Banda of being “part and parcel” of the fraud scandal.

Peter Chinoko, an outspoken head of the Catholic Commission for Justice and Peace in the Lilongwe archdiocese, said: “We have concrete evidence about the president’s involvement and being part and parcel of the scandal.”

Chinoko said the looting was aimed sponsoring the campaign of Banda’s ruling People’s Party, which was only formed a year ago with no national grassroots support, ahead of May 20 local, national and presidential elections.

Information Minister Brown Mpinganjira, a key backer of Banda’s policies, has dismissed the claims by Chinoko, saying this was a “plan to blackmail the president so that she stops the investigations currently under way”.

“The president is being threatened to embarrass and frustrate her efforts to fight corruption,” Mpinganjira, a veteran politician said.

“This is a well planned and calculated strategy by those that are trying to run away from the full force of the law to try and smear as many individuals as possible.”

Joyce Banda has said she took a “political risk to launch a fight against corruption five months before the elections”.

She says the fight against corruption “must come first, winning elections comes second to me”.

Lutepo One prominent figure on trial is businessperson Oswald Lutepo, a senior official in Banda’s party, who is accused of theft and money laundering and is alleged to have pocketed more than $6-million from government coffers through ghost companies which did not provide any services to the state.

Lutepo is said to have donated 22 vehicles to Banda’s party and paid a record bail bond of $100 000.

Malawians will also follow with keen interest the evidence in court of former justice minister Ralph Kasambara, who has been charged with attempted murder of Mphwiyo although police have yet to establish the link between the shooting incident and the scandal.

The president has publicly claimed that Mphwiyo’s shooting was “a planned and targeted attack aimed at silencing him and the government in the fight against high levels of corruption and fraud”.

She has often insisted Mphwiyo will give the correct version of events leading to his shooting.

She has conceded that corruption is deeply entrenched in Malawi, but insists that it predates her tenure by years.

Nonetheless, the case represents a threat to her hopes of winning the presidency in May.

Billy Mayaya, director of the National League for Democracy and Development, told the Guardian the scandal means her chances of winning are “very slim”.

She said: “Malawians are angry at the massive looting of government resources and want answers as who is really behind this rot.” –​ guardian.co.uk © Guardian News and Media 2014  M&G

Malawi – donors holding back aid over cashgate scandal

VoA/allAfrica

Malawi: Donors Withhold Aid Over Cashgate Scandal

By Lameck Masina,

Photo:   IRIN               

Children at a school feeding project (file photo).    

Blantyre — Several donor nations are withholding aid to Malawi in reaction to a growing scandal over government graft known as Cashgate. The latest to announce the delay of funding are donors under the Common Approach to Budget Support (CABS) who are meeting in the capital, Lilongwe. Government authorities say this is likely to pose economic problems in a country where 40 percent of its national budget comes from donor aid.

Announcing the move during its first review meeting of the 2013-2014 budget on Thursday, the funding group said it has decided to delay its aid to Malawi after its loss of confidence in the government’s financial system. The so-called Cashgate scandal has thus far resulted in the looting of more than $250 million from government coffers.

Sarah Sanyahumbi is co-chair of the CABS group and head of Department for International Development (DFID) in Malawi.

“It is clear from what we already know, even though investigations are ongoing, that there are serious weaknesses in the government’s financial systems which allowed [what] we call Cashgate to actually happen. So we have seen serious weaknesses which have enabled people to take money out of the government system. While that is the case, you know the donors cannot responsibly continue to put money into government systems. So at the moment, while the investigations are going on, we have delayed any funding which was planned to go into the government system,” said Sanyahumbi.

The decision comes a few days after the European Union and DFID withheld their funding to Malawi until authorities come to the root of the financial looting. Norway has completely suspended its funding to Malawi because of the problem.

Sanyahumbi, however, believes not all is lost.

“[But] that doesn’t mean that all development support to Malawi has stopped. It’s budget support and sector budget support [that has been affected]. So all other programs or projects like in health, education, food security, etc. etc. are still ongoing,” she said.

But Finance Minister Maxwell Mkwezalamba pleaded for mercy from donors, saying the suspension of budget support for Malawi spells doom for the country.

“We are concerned with the decision to delay this disbursement. The impact on the economy on Malawi people will not be good. When you look at what we were expecting for this quarter alone, we were looking at $150 million, and if it doesn’t come, which is likely to [because of] the case, this means we have to have another look at our budget framework,” said Mkwezalamba.

He assured donors that the government has an action plan that will help get to the root of the issue and bring to justice the culprits in the looting.

But Sanyahumbi said there is no turning back because the “line” already has been crossed.

“Really, we expect significant commitment to action to be taken. We are talking about an extraordinary path. This is not business as usual. As far as we are concerned, the line has been crossed, so once the line has been crossed you cannot go back to what you had before,” she said.

An International Monetary Fund (IMF) team is in the country on a make-or-break mission to gather information on the Cashgate scandal.

Its weeklong fact-finding efforts will determine Malawi’s fate on whether the IMF will further disburse its $20 million under the Extended Credit Facility.  all Africa