JB applauds Mutharika; Hails German, UK for Malawi cashgate probe 

Malawi former president Joyce Banda has applauded her successor Peter Mutharika for continuing with what she started on crackdown into the biggest financial scandal in Malawi’s history called cashgate.

Banda, during a lecture at the prestigious London School of Economics and Police Science on Wednesday evening said former EU envoy to Malawi Alexander Baum played a vital role in helping her realise that there was pilfering of public funds with “loopholes” in the public payment system introduced by her predecessor Bingu wa Mutharika.

She said the looting actually took place over a longer period dating back to 2005 when Mutharika, who died suddenly in 2012, was in power.

“Upon learning the nature and gravity of theft of resources in the public service, I immediately instituted a forensic audit by external auditors,” Banda told a fully packed LSE auditorium in a lecture which was streaming live at the top university’s website.

“I had decided to get to the bottom of the problem and stop theft and corruption in government once and for all. Government audit reports indicated that this systemic cancer had started way back in 2001 but had been left to permeate and mature.”

A number of government officials implicated in the fraud are facing criminal charges, and a first official was jailed last month for three years over the scandal.

“I had committed myself to fight corruption without fear knowing very well the repercussions on my political career as elections were just months away.

“I had realized that if we stopped theft and corruption in Government, we would save close to 30 percent of our national budget. I made these decisions knowing very well that those affected will fight back, smear and blackmail me with all sorts of name calling and threats including death threats. But I needed to deal with the matter once and for all,” said Banda.

Malawi former president hailed the British Government for providing to financial support to conduct an external forensic audit conducted by London based Baker Tilly into the cashgate scandal.

She   also the German Government “who have taken my request to finance the second phase of the forensic audit into 2009 to 2012 period.”

Germany, one of the countries that suspended aid to Malawi after the cashgate scandal, has granted Malawi  about K9 billion  ( $25-million)  to conduct an audit under the Democratic Progressive Party (DPP) rule in what is being christened as ‘DPP K92bn cashgate’ scandal..

“The German-funded audit is to quantify the amount misappropriated over the period 2009-2013,” Katrin Pfeiffer, head of development co-operation at the German embassy, said in a statement.

An interim investigative audit report of the government payment system known as Integrated Financial Management and information System (Ifmis) that the National Audit Office carried out between November 2011 and first half of 2012, which was kept under wraps, showed that government lost over K90 billion through abuse and irregularities.

Price waterhouse Coopers (PwC) International has been named as the audit firm to carry out the exercise.

During the LSE lecture, Banda also hailed Mutharika for continuing with the cashgate probe.

“I also wish to applaud my successor President Peter Mutharika for deciding to continue with this program to fight theft and corruption in the country,” said Banda.

The drama began in September 2013  when Paul Mphwiyo, the then  budget director and the person former president Banda  had tasked to close the loopholes in the public purse, was shot three times in the head in Lilongwe. Miraculously, he survived the attack and is amongst state witness in his shooting case.

Ralph Kasambara, former minister of Justice, has been accused of orchestrating the assassination attempt of Mphwiyo and if facing charges related to that. He is also facing separate money laundering  charges together with chief suspect Oswald Lutepo. He denies any wrong doing.

The Anti Corruption Bureau (ACB) says roughly K20 billion went missing Banda’s two year rule. They add that probably another K90 billion went missing over the eight years of the presidency of the late Bingu wa Mutharika, equal to roughly $500m at the exchange rate of the time.

In total about 30 per cent of the country’s budget could have been looted over a decade – almost as much as donors have provided Malawi over the same period.

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