President Joyce Banda of Malawi named a new cabinet on Tuesday having disbanded the previous one following allegations of high-level fraud and corruption.
In what has been dubbed the Cashgate scandal, several government officials last week were arrested after an ongoing police and Anti-Corruption Bureau exercise caught them with thousands of dollars in cash hidden under their beds and in their cars.
Those arrested include the Principal Accountant and Assistant Accountant in the Office of President and Cabinet who stand accused of facilitating a payment of 1 billion kwacha ($200,000) to the International Procurement Services, a firm owned by a member of Banda's People’s Party.
Meanwhile the most notable casualties of President Banda’s cabinet reshuffle include Finance Minister Ken Lipenga and Justice and Constitutional Affairs Minister Ralph Kasambara.
The scandal followed the shooting of Paul Mphwiyo, budget director in the finance ministry, who is seen as an anti-corruption crusader. Although it is not yet known for sure, many believe he was attacked in an attempt to stop him from revealing a corruption syndicate in government. After the attempted assassination, Mphwiyo was airlifted to South Africa for emergency treatment, where he is recovering. Malawian police were recently flown to South Africa to interview him.
Speaking to reporters in the capital Lilongwe, Hawa Ndilowe, Secretary in the Office of the President and Cabinet, explained that large quantities of money are believed to have been siphoned off via loopholes in the government’s central payment system. The system is known as the Integrated Finance Management Information System (IFMIS) and has been used since 2005.
The government has therefore suspended IFMIS paving way for investigations and asked for international help to make the system fraud proof. The UK, meanwhile, has offered to fly in experts to help Malawi in forensic auditing of government ministries.
Demonstrating a commitment to combat fraud is particularly important for Malawi, a country dependent on donors for around 40% of its national budget. Cashgate as well as other recent corruption scandals involving government officials has eroded confidence in Banda’s administration, and donors have threatened to suspend funding unless the government proves they are doing enough to tackle graft. The European Union, for example, said it would have to withhold a transfer of 29 million Euros ($40 million) due in December unless they saw sufficient signs of action. Meanwhile Norway has already suspended funding saying that according to its “zero-tolerance policy on corruption” it cannot disburse budget support to Malawi until the matter is fully resolved.
President Banda has thus been keen to emphasise the actions she is taking to combat graft, but has also stressed that corruption did not start with her government.
“It is important that I put the recent development in perspective so that the nation should know and appreciate of these developments”, she said. “It is a known fact that the challenge of corruption has been before us for a long time. For example, under the United Democratic Front Administration [which ruled from 1994 -2004] then Director of Public Prosecution announced that 30% of our budget was being lost through fraud and corruption.”
Banda continued that the same was the case under the Democratic Progressive Party, which ruled from 2004- 2012, and cited the recent allegations that former president, Bingu wa Mutharika, managed to accumulate 61 billion kwacha ($12 million) during his eight years in office.
However, while Banda’s dissolution of her cabinet has been seen as a dramatic step, some groups believe that much more is needed to be done to truly root out government graft.
Malawi’s Human Rights Commission, for example, released a statement saying that “The recent developments raise serious issues of broader structural challenges relating to public governance in the country” and insisted that “Efforts should also be directed at application of the legal mechanism for the tracing of all the proceeds of the malpractices and recovery and restoration of the same to the public coffers.”
The Commission also expressed particular concern over the failure of Banda and other public officials to declare their assets in accordance with Malawi’s Constitution, saying their refusal “undermines the essence of fiduciary duties and responsibility those entrusted with public offices are expected to observe and uphold in the discharge of their duties.”
President Banda has responded by claiming there are loopholes in the current Assets Declaration Bill allowing other public officials from declaring their assets and has pushed for a new bill. She also suggested that she has come under more pressure than her predecessors to declare her assets because she is a woman.
Banda has also brought forwards the date parliament will deliberate on how to deal with government graft and on the new Assets Declaration Bill to 21 October.
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