APM hits at donors for aid withdrawal

President Peter Mutharika has hit at donors accusing them of bypassing the national development agenda with the insistence to provide funding outside the government systems.

Speaking in an interview with British Broadcasting Corporation (BBC) Hard Talk programme with Zeinab Bardawi on Monday, Mutharika said donors were punishing the Democratic Progressive Party (DPP) administration by withholding aid when it was not to blame for Cashgate.

Cashgate was exposed in 2013 under the administration of former president Joyce Banda resulting in the loss of K24 billion from the government coffers between April and September, according to a forensic audit by British firm Baker Tilly.

Following concerns of poor public finance management, most of Malawi’s traditional donors withdrew budgetary support and have opted to disburse funds off-budget, a development that has irked government which says it no longer has control over priority areas to receive funding.

Last week, several donors unveiled a $21 million (about K12 billion)contribution to the health sector, but said the money would be disbursed through commercial banks not the government’s Account Number One.

But Mutharika said it was because of the mistakes of Banda and her People’s Party (PP) administration that hospitals had no medicines and people were suffering.

He said: “Cashgate was done by previous governments, now are you going to punish subsequent governments when they were not involved? In the end, it’s the people who will suffer. I tell you what, what is happening in Malawi is very serious. There is no medicine in the hospitals because donors left.”

Mutharika said Malawi was facing difficulties because he came into power at a time when money had been depleted in the Treasury due to Cashgate and floods had hit most parts of the country rendering many people without food and homeless.

The President seemed angered at donors’ decision to opt for disbursing funds off-budget.

“The trouble is we have a national development that must be done within the context of a development plan and when donors come and identify something without central government knowing and controlling their funding, this undermines us,” he said.

Mutharika has repeatedly said Malawians should forget donors and find means of generating resources locally.

But to BBC, Mutharika said Malawi needed two to three years of donor support to recover from the financial crisis.

On Cashgate, APM took shots at JB on her alleged involvement in Cashgate, but backtracked when Bardawi challenged him that it has not been proven in the courts that Banda was involved.

“It happened under her government. We are still carrying out investigations, but there are ministers and party officials in her government who were involved,” he said.

In the same vein, Mutharika questioned what happened to the proceeds of the presidential jet which was sold in 2013.

He told BBC that Banda was under investigations on the sale of the jet.

The jet was bought at $20 million by the government of Mutharika’s brother, Bingu, which resulted in the country’s biggest donor partner, Britain withdrawing aid.

Bardawi did not take to heart Mutharika’s insistence that corruption and specifically Cashgate was to blame for the country’s development woes.

She said governance issues were at the heart of the country’s problems because corruption existed even during Bingu’s reign.

But Mutharika said this was a simplistic view of looking at things because corruption was endemic and he had instituted measures to uproot it by instituting a headcount in the civil service and prosecuting those involved in Cashgate.

Mutharika has just returned home from a two-week tour to Malta where he attended the Commonwealth meeting, London where he attended the Global Investment Summit and South Africa for the Forum for China-Africa Cooperation meeting.

In his address to British parliamentary committees, the President outlined several reforms his administration is implementing to regain lost confidence from development partners who withdrew their 40 percent contribution to Malawi’s national budget in October 2013 amid concerns of Cashgate—the plunder of public resources at Capital Hill.

Britain, on the other hand, suspended its aid to Malawi in 2010 over concerns of lack of financial prudence by the previous DPP administration led by the late Bingu.

This was after the DPP administration had bought a presidential jet and top-of-the-range luxury vehicles for Cabinet ministers with funds perceived to be from donors.

For a long time, Malawi’s public finance management has been rocked by reports of abuse of funds with the Directorate of Public Prosecutions (DPP) at one time proclaiming that about 30 percent of resources allocated in the national budget went into people’s pockets.

In 2013, the shooting of former Ministry of Finance budget director Paul Mphwiyo led to revelations of Cashgate, the plunder of public resources at Capital Hill.

Banda ordered an audit which established that about K24 billion was siphoned from public coffers through dubious payments, inflated invoices and goods or services never rendered.

In May this year, a financial analysis report by audit and business advisory firm PricewaterhouseCoopers (PwC) also established that about K577 billion in public funds could not be reconciliated between 2009 and December 31 2014. n