In the wake of the devastating effects of Cashgate, Minister of Finance, Economic Planning and Development Goodall Gondwe has said Malawi is undergoing a serious public finance system change to prevent looting of public funds.
The minister said Cashgate, the plunder of public resources at Capital Hill, resulted from a weak public finance system and “unethical” people who did not care about the welfare of others.
He was speaking on Thursday in Lilongwe at the official opening of a new German Development Cooperation office to be shared by German International Cooperation (GIZ) and KfW, a German development bank.
Said Gondwe: “We are going to improve the system so that even such people who want to take advantage cannot do so because we will have control. We have already started with structures like Ifmis [Integrated Financial Management Information System]. Now it is a question of going into fiscal discipline in the ministries.”
Gondwe, who assured Malawians and the donor community of a strong administrative and finance management system, said Cashgate has opened the country to new ideas.
“We now have answers and we assure you we will be stronger than before. We will fight this because we want to. There are countries like Uganda which went through similar scandals, but are now recovered,” he said.
The minister thanked the German government for their continued support even after Cashgate.
German Ambassador Peter Woeste promised that his country will work with Malawi on a comprehensive reform of public finances.
GIZ country director Mathias Rompel said out of 130 countries that German works with across the world, Malawi is its priority.
Cashgate resulted from abuse of Ifmis introduced in 2005. The scam was uncovered under the watch of immediate past president Joyce Banda after the shooting of former Ministry of Finance budget director Paul Mphwiyo.
A forensic audit by British firm Baker Tilly established that K13 billion was abused between April and September 2013. But in the final report released two weeks ago, amount involved is estimated at K24 billion.