Malawi to refund K3bn it misused
Malawi Government will squeeze $6.4 million (nearly K3 billion) from its thinning taxpayers to refund the Global Fund after Capital Hill splashed the money on unplanned expenditures.
The ineligible expenditures in 2010—unearthed by the Fund’s independent audit body, the Office of the Inspector General (OIG)—included buying of unbudgeted for vehicles.
The misprocurements happened at the Ministry of Health and the National Aids Commission (NAC), where an audit is still underway, according to documents we have seen.
The documents show that government has, however, managed to pay in full $3.3 million (about K1.5 billion) and is yet to repay the balance of $3.1 million (about K1.4 billion).
Of the remainder—to be repaid to the Health Sector Wide Approach (SWAp) and NAC pool funds—the Ministry of Health reportedly misused $2.2 million (K990 million) whereas NAC shouldered $1.9 million (K855 million).
These misprocurements were part of the agenda on January 19 2015 when a high-level Malawi delegation held talks with Global Fund’s senior managers in Geneva, Switzerland on a number of issues.
The Malawi delegation was led by Minister of Health Jean Kalilani and included Chief Secretary to the Government George Mkondiwa, UNAids country director Amakobe Sande and NAC acting executive director Davie Kalomba.
Due to its weak repayment ability, government requested the Fund to refund the outstanding amounts over a three-year period starting from 2015/16.
But the proposal was rejected and the two parties settled for a two-year repayment period.
Ministry of Finance spokesperson Nations Msowoya confirmed the arrangement in an interview on Thursday, saying government has since committed to honouring the repayments.
The Global Fund wants the amount to be repaid within the upcoming grant period, which ends in December 2017.
According to Msowoya, the money to be refunded was used to buy vehicles, a procurement that was not approved.
The vehicles were donated to the Central Medical Stores Trust (CMST) and other public institutions involved in health service delivery.
“The money was used to buy vans instead of smaller vehicles and the Global Fund treated that as misprocurement,” said Msowoya, adding that government is repaying the money through its annual budget.
Reacting to the development, health rights activist Maziko Matemba described the development as retrogressive for a financially crippled country such as Malawi.
Since the country’s leading donors withdrew budgetary support that traditionally accounts for around 40 percent of the national budget due to Cashgate—the daring looting of multiple billions of kwacha from Treasury by some civil servants, politicians and businesspersons—government has struggled to fund its operations, including paying of salaries. The K3 billion refunds just exert more pressure.
During the Geneva talks, it was agreed that government should conclude discussions with its pool funding partners on the distribution of the refunds as per financing source by this month (March).
It was also agreed that the outstanding ineligible amounts be repaid in full by June 2017, according to one member of the delegation.
NAC and the Ministry of Health were also asked to submit written updates on the outstanding recommendations.
Another audit conducted by the National Audit Office (NAO) exposed details of how State House and the Joyce Banda Foundation International (JBFI) obtained funds under dubious circumstances between 2013 and 2014 from NAC.
NAC has also endured bad publicity in recent months after dishing out grants to Mulhako wa Alhomwe, which has strong links to the ruling Democratic Progressive Party (DPP), and First Lady Gertrude Mutharika’s Beautify Malawi (Beam) Trust.
Both organisations do not have HIV and Aids activities in their profiles.
