Malawi has in the past 10 years suffered absence of political and public service leadership which has seen politically exposed persons, including Presidents and their cronies, allegedly bending the law to loot from public coffers, a report shows.
In his article titled A Jaded Decade of State Capture published online on December 10, renowned lawyer and certified fraud examiner Kamudoni Nyasulu, who has represented the Malawi Government in most Cashgate cases, observes that some individuals and political parties have benefited from this loot.
He argues that since 2010, Malawi has and continues to witness State capture—a systematic political corruption in which private interests significantly influence a State’s decision-making processes to their own advantage.
But President Peter Mutharika, speaking through his spokesperson Mgeme Kalilani, argues that he is not party to any ‘State capture’, saying all cases of Cashgate happened before he assumed office in May 2014.
Nyasulu’s analysis dwarfs Mutharika’s argument that Lilongwe has established measures to enhance accountability and transparency in public procurement and financial management systems, essentially dealing with corruption.
Some legal and governance analysts have also backed Nyasulu, stressing that Malawi’s public service is infested with corruption allegedly because the leadership is party to the act, and that there is too much rhetoric on podiums than actions.
The Corrupt Practices Act (CPA) under Section 25 B (1) speaks against public officers abusing public offices for personal advantage or for the advantage of other people to obtain wealth, property, profit or business interest.
Politically exposed persons, who the Financial Crimes Act (2017) defines as the President, the Vice-President, persons appointed into public office by the President, elected officers, politicians, among others, have facilitated this abuse, according to Nyasulu.
He argues: “State capture and the predicate infamy of Cashgate were facilitated by politically exposed persons who stood to benefit personally or their political affiliations, family or friends. Our political leaders and leaders of our public service are all politically exposed persons.
“The genesis of State capture appears to have been problems of exchange rate and inflation as illustrated by the 2013 ‘international reserves…[at] precariously low levels. Witnesses in Cashgate cases said businesses fully funded supplies to the Malawi Government.
“This must also have been the foundation for the accumulation of domestic payment arrears which were to wreak havoc on the Malawi economy in the years 2013 – 2018. The payment of domestic arrears itself presented a fertile swamp for fraud and corruption, predicate offences for money laundering.”
While individual liability might be an issue of ‘innocent until proven guilty’, Nyasulu argues that some political parties too benefitted from the loot, and must be deemed politically exposed entities.
In their sworn statements, businessperson Osward Lutepo, currently serving an 11-year jail term for conspiracy to defraud government and money laundering of K4.7 billion as well as senior civil servants Leonard Kalonga and Theresa Senzani (now deceased), detailed how proceeds from their crime were channelled to the then governing People’s Party (PP).
In the controversial K2.7 billion Malawi Police Service food rations deal, businessperson Zameer Karim transferred K145 million into a Democratic Progressive Party (DPP) bank account at Standard Bank whose sole signatory is Mutharika.
In an interview yesterday, lawyer Justin Kusamba Dzonzi said corruption is an inevitable occurrence when multiparty democracy is combined with capitalistic economic policies because businesses normally fund campaigns to buy freedom to loot.
He said: “Corruption is a crime of power. So, any person whom you give power is immediately exposed to corruption. This is why in police and immigration, there is a lot more corruption because you have empowered somebody to issue out documents.
“I want you to draw into this explanation the reality of democratic politics. This system is highly competitive and is reducible to money.”
On his part, anti-corruption law expert Wesley Mwafulirwa said Malawi lacks political will from the leadership, which is the most important tool to deal with the vice.
He said: “Where there is no will, we can’t win the fight against corruption. Our leaders are heavily compromised. They are surrounded by people whose sole interest is to loot. Even in the opposition we have too much corruption.
“The present legal framework also gives little independence to ACB, the Executive branch is still too powerful. Even the director general cannot prosecute before getting permission from the director of public prosecutions [DPP]. This explains why some cases have been handled in a very questionable manner.”
Mwafulirwa suggested what he terms ‘Deep Democratisation Theory’ which empowers citizens to check those in power on how they are amassing their wealth.
Earlier, governance expert Henry Chingaipe said the problem with Malawi is that anti-corruption strategies are developed for road shows, just to hoodwink donors by making them believe that the country is serious on the vice when it is not.
In his presentation on Public Purse: Use, Misuse and Abuse of Government Resources, Dan Kuwali, an international law expert, said Malawi’s public finance management laws are impressive on paper but not formidable because of loopholes that promote abuse of public resources.
He said: “We also need to reward good and punish the bad, empower the citizens so that they are able to abhor corrupt practices, inculcate a culture of integrity and professionalism but also integrity checks.”
ACB director general Reyneck Matemba has publicly declared that all public institutions, especially those that provide services to the citizenry, are rotten to the core in corruption.
He said: “I want to be realistic. As a country, we have a long way to go. We have a problem and I think the first thing we have to do is to accept that we have a problem.”
But Kalilani argued yesterday that the facts of the matter do not support the insinuation of allegations of ‘State capture’ against the current administration.
He said the police food rations deal case is still in court; hence, not professional to comment on the same.
Kalilani also said ACB cleared Mutharika of any wrong doing.
Malawi is performing poorly on international rankings, scoring 32 points on Transparency International (TI) Corruption Perception Index (CPI), while the 2018 Mo Ibrahim Index of African Governance (IIAG) also raised concerns on transparency and accountability.