Malawi govt plans to address ‘Cashgate’

Malawi’s new President Peter Mutharika says his administration has formulated a comprehensive action plan to decisively deal with “Cashgate”, the plunder of about $30 million (R324m) of public funds by a conspiracy of politicians, civil servants and business people.

“Corruption deprives the people of Malawi, particularly the poor, of their legitimate right to economic prosperity by diverting sources meant for economic social development into the pockets of a few greedy individuals. It also scares away potential investors,” he said in his first State of the Nation address in Parliament in Lilongwe on Tuesday.

“My government will maintain zero tolerance to corruption, fraud, theft and other economic crimes. There will be no sacred cows, indeed there will be no untouchables.”

Mutharika, who came to power in controversial elections on May 20, unseating Africa’s second woman president Joyce Banda, said his government would address weaknesses in the finance management system identified in a forensic audit report by a private British firm.

“The action plan looks at short, medium and long-term measures which government needs to implement to prevent another Cashgate and avoid theft of public funds,” Mutharika said.

“The action plan looks at all aspects of public finance and economic management, including accounting, internal controls, budgeting, procurement, disciplinary issues, administrative reforms and capacity building needs.”

Forensic auditors discovered that about 13 billion Malawi Kwacha (about R330 million) disappeared from public coffers in payments for goods and services which were never provided to government.

The mysterious shooting last year of budget director Paul Mphwiyo, who was believed to investigating the corruption, prompted the unravelling of the worst financial scandal to hit government in the 50 years Malawi has been an independent state. Suddenly public servants and businessmen were being found with huge stacks of cash hidden under their beds or in their car boots. More than 70 public servants and business people are currently on trial of corruption, theft and fraud charges around Cashgate.