Cashgate suspect implicates Minister in $30 million arms refund

Cashgate suspect implicates Minister in $30 million arms refund

Malawi city of governemnt where cashgate was ochestrated

By Margaret Kudatha

Former Budget Director, Paul Mphwiyo, has implicated Minister of Trade, Joseph Mwanamvekha, in a scandal where a $30 million (MK2 Billion) United Nations refund to the Malawi government for a similar amount the government used to buy weapons for peacekeeping in the Democratic Republic of Congo vanished without trace.

In warn and caution statements to the Malawi Police Service, Mphwiyo said the Malawi government bought weapons for $30 million from SF International.

Mphwiyo is currently standing trial for allegedly coordinating the siphoning of public funds in 2013 in a scheme dubbed cashgate where public servants connived with private companies and individuals to siphon from the treasury billions of Malawi kwacha for goods not delivered or services not provided.

The money was to be refunded by the United Nations as is the practice in peacekeeping arrangements. $30 million is equivalent to almost K2 billion.

According to Mphwiyo, an account was opened at the then Malawi Savings Bank now FDH Bank where the United Nations allegedly made the refund.

When contacted, Mphwiyo could not pick his phone over a three week period. However, the money can no longer be traced, and only Mwanamvekha knows where this money went, he said. Mwanamvekha ignored several calls when CIJM wanted to get his side of the story. There is no record that Mwanamvekha was ever asked to explain where the cash went.

Neither the Malawi Police Service nor the graft busting body, the Anti-Corruption Bureau has probed the mystery surrounding the $30 million refund from the United Nations.Several inquiries to both MPS and ACB have hit a wall as officers from these two government agencies promised to come back with answers but never did.

Mphwiyo also reaffirms his conviction that former Justice Minister and Attorney General Ralph Kasambara was the mastermind of the plot to murder him. He says he specifically identified Kasambara’s friend, Pika Manondo, as the individual he personally saw at the scene where he was shot on 13 September 2013.

Mphwiyo also raises questions about the role of the office of the Accountant General in Cashgate. “The Accountant General’s office has copies of the approved budget for all ministries. Why were they signing cheques that had figures above the ministries’ budgets?” he queried.

He mentioned the Ministry of Tourism as one of those whose budget had been exceeded, yet the Accountant-General still continued to sign cheques that originated from that ministry.

Mphwiyo blamed Principal Secretaries for being ignorant about the workings of the Integrated Financial Management Information System (IFMS), which makes them leave everything to their juniors. The Principal Secretaries later signed anything that came to their desks without questioning and scrutinising the documentation.

Mphwiyo also pointed to the complete lack of discipline in the way the government uses its funds. The government, for instance, can borrow from the Reserve Bank up to a threshold of 10 per cent of the previous year’s revenue, but this threshold is always exceeded by many measures, without anyone bothering to put in place control mechanisms.

Mphwiyo attributes this to lack of coordination between the Ministry of Finance and the Reserve Bank of Malawi. Mphwiyo also said similar recklessness is prevalent in the credit ceiling authority for district assemblies. However, commercial banks allowed assemblies to overdraw, resulting in a deficit that ran into an unspecified amount of billions of kwacha in 2012 alone.
But in the same statement, the former Budget Director says that Ralph Kasambara was pushing for billions of kwacha in payments to some companies, although owners of those companies were not pushing for the monies themselves.

Mphwiyo mentioned Delco Terrastone, which had been contracted to build Malawi Parliament which Malawi’s former diplomatic friend Taiwan had pledged to fund. However, when Malawi switched diplomatic ties to mainland China, the Chinese brought their own people who constructed the new Parliament.

Mphwiyo said government paid compensation in full, though he did not specify the amount. Regardless, Kasambara was pushing Mphwiyo to pay an additional MK9 billion Delco Terrastone.
The Delco case was a default judgment which the Attorney-General’s office did not contest.