Malawi to refund World Bank K43m mismanaged funds

As government is wooing donors who are currently withholding crucial budget support in protest at rampant corruption, there are fears that K43 million meant for the public works programme in Dowa and Phalombe has been mismanaged.

The development has led to the World Bank, which contributes to the fund which is administered through the Ministry of Local Government and Rural Development, to ask government to refund the money following failure to account for its usage.

Ministry of Finance, Economic Planning and Development spokesperson Nations Msowoya confirmed in the week that an audit query has sparked fears that the two councils have mismanaged K43 million (about $92 000) whose documentation is missing, raising fears that the money might have been stolen.

He confirmed that the Phalombe and Dowa district councils are reported to have failed to account for the money.

“The World Bank is yet to officially raise the demand for the refund but it was raised at the programme’s coordination level that we will have to repay. It’s an automatic query. We had a deadline of October 31 to provide the missing supporting documentation through the councils which we have failed to do and we now have to refund the money as agreed,” said Msowoya.

He said the ministry, through relevant government institutions, is yet to institute an inquiry on whether the funds were stolen or not.

“We do not have any evidence at the moment that these funds were stolen or not. The query came in first because we did not submit documentation showing how the money was used, either receipts or documents, indicating that people who worked under the public works programme were paid through signed payment sheets. Now we have passed the deadline in which our colleagues requested us to submit the information we demanded,” added Msowoya.

Minister of Finance Goodall Gondwe, while saying he is yet to see a report on the matter, described the development on Thursday as a big blow to the country at a time government was cash-strapped and fighting to rebuild its fiscal image.

“Too many concerns [in this matter]. I am first concerned that such scandals are continuing to happen at all. We have suffered enough scandals, it’s extremely worrying to be hearing such news. Secondly, it’s also a concern because government does not have the resources to be wasting money on repayment of such funds,” said Gondwe.

Minister of Local Government and Rural Development Trasizio Gowelo said he was not aware of the matter.

“This is news to me, I am not aware of anything. I am hearing it from you. I would love to hear what really happened and I would request a briefing from the Principal Secretary. If it is true, then it is very unfortunate,” said Gowelo.

World Bank Malawi country office communications manager Zeria Banda was yet to respond to our questionnaire on the matter as we went to press yesterday.

Donors, who fund over 40 percent of Malawi’s national budget, continue to withhold direct budgetary support following the Cashgate scandal.

Several businesspersons, politicians and government officials are currently being prosecuted in court over the scandal with three people already found guilty by various courts.

The public finance management scandal has, among others, also led to the country’s Extended Credit Facility Programme with the International Monetary Fund, whose mission was in the country this week, being declared off track.

The mission’s meetings with government officials has failed to raise hopes that the programme will be back on track soon to signal to the western donors to resume direct aid.