‘Digital payment system could have prevented Cashgate’
Minister of Finance Economic Planning and Development Goodall Gondwe says the country could have prevented Cashgate if digital payments ecosystem was adopted earlier.
Speaking during the launch of the digital payment ecosystem at Sunbird Capital in Lilongwe on Thursday, the minister said Cashgate was possible because of the manual system which allowed people cash huge sums of money.
The digital payments ecosystem connects participants in an electronic payments network based on shared and open standards, and is used by government, businesses and consumers to buy and sell physical and digital goods and services and to make transfers.
Said Gondwe: “If this technology we are launching today had been done 30 years ago, we could not have been talking about Cashgate. Cashgate happened because huge sums of money could be carried around anyhow without people questioning.
“I would want to encourage all those who are behind this technology to move faster because what happened with Cashgate is very embarrassing. In fact, all of us who regard ourselves as leaders in the financial sector should be ashamed of Cashgate.”
According to Gondwe, the benefits for governments, development organisations, companies and consumers of shifting away from cash to electronic include lower transaction costs, greater transparency and accountability and more secure transactions.
UN resident coordinator who is also UNDP representative Mia Seppo said when governments manage their social, salary, procurement payments, taxation and licensing receipts electronically, it creates a foundation upon which the private sector and people can build and begin to transact digitally.
She said digital migration requires the policy support of the Ministry of Finance and the oversight of the Reserve Bank of Malawi (RBM) to ensure consumer protection.
Usaid Malawi mission director Doug Arbuckle said there are multiple benefits of receiving payments through an electronic or digital system because transactions are more secure and can be easily traced.
“The new payment system can also offer deeper benefit by providing a foundation for a wider range of financial services and value added business services. For many at the base of the pyramid this can mean the first opportunity to access bank account with savings, loans, insurance and basic money management tools,” said Arbuckle.
RBM governor Charles Chuka concurred with Gondwe that if Malawi had adopted this system earlier, those involved in Cashgate could have been traced.
“People all over the world are moving away from using cash and cheques. With digital payments, we could have detected Cashgate early enough and even those who stole the money could have been easily apprehended,” said Chuka.
Chuka said with the proliferation of cell phones in rural areas, more people are being banked and are accessing paper less transactions easily.
