News / Africa

Malawi: Donors Withhold Aid Over Cashgate Scandal

FILE - Malawi President Joyce Hilda Mtila Banda addresses the 68th session of the United Nations General Assembly.
FILE - Malawi President Joyce Hilda Mtila Banda addresses the 68th session of the United Nations General Assembly.
Lameck Masina
Several donor nations are withholding aid to Malawi in reaction to a growing scandal over government graft known as Cashgate. The latest to announce the delay of funding are donors under the Common Approach to Budget Support (CABS) who are meeting in the capital, Lilongwe. Government authorities say this is likely to pose economic problems in a country where 40 percent of its national budget comes from donor aid.

Announcing the move during its first review meeting of the 2013-2014 budget on Thursday, the funding group said it has decided to delay its aid to Malawi after its loss of confidence in the government’s financial system.  The so-called Cashgate scandal has thus far resulted in the looting of more than $250 million from government coffers.

Sarah Sanyahumbi is co-chair of the CABS group and head of Department for International Development (DFID) in Malawi.

“It is clear from what we already know, even though investigations are ongoing, that there are serious weaknesses in the government’s financial systems which allowed [what] we call Cashgate to actually happen. So we have seen serious weaknesses which have enabled people to take money out of the government system. While that is the case, you know the donors cannot responsibly continue to put money into government systems. So at the moment, while the investigations are going on, we have delayed any funding which was planned to go into the government system," said Sanyahumbi.

The decision comes a few days after the European Union and DFID withheld their funding to Malawi until authorities come to the root of the financial looting. Norway has completely suspended its funding to Malawi because of the problem.
 
Sanyahumbi, however, believes not all is lost.

“[But] that doesn’t mean that all development support to Malawi has stopped. It’s budget support and sector budget support [that has been affected]. So all other programs or projects like in health, education, food security, etc. etc. are still ongoing," she said.

But Finance Minister Maxwell Mkwezalamba pleaded for mercy from donors, saying the suspension of budget support for Malawi spells doom for the country.
 
“We are concerned with the decision to delay this disbursement. The impact on the economy on Malawi people will not be good. When you look at what we were expecting for this quarter alone, we were looking at $150 million, and if it doesn’t come, which is likely to [because of] the case, this means we have to have another look at our budget framework," said Mkwezalamba.

He assured donors that the government has an action plan that will help get to the root of the issue and bring to justice the culprits in the looting.

But Sanyahumbi said there is no turning back because the “line” already has been crossed.

“Really, we expect significant commitment to action to be taken. We are talking about an extraordinary path. This is not business as usual. As far as we are concerned, the line has been crossed, so once the line has been crossed you cannot go back to what you had before," she said.

An International Monetary Fund (IMF) team is in the country on a make-or-break mission to gather information on the Cashgate scandal.

Its weeklong fact-finding efforts will determine Malawi's fate on whether the IMF will further disburse its $20 million under the Extended Credit Facility.

You May Like

Lesotho Faces New Round of Violence, Political Crisis

Brutal killing of military officer has sent former leaders back into S. Africa where they're watching anxiously as regional officials head in to try to restore peace More

Video US Diplomat Expects Adoption of Bosnian Massacre Anniversary Resolution

Samantha Power says there's broad consensus about killings in Bosnia's war, but Russia calls resolution 'divisive,' backs UN countermeasure More

UN Report Exposes Widespread Boko Haram Atrocities

Damning report graphically details pattern of vicious, widespread atrocities committed by Islamist militants More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Olympics Construction Scars Sacred Korean Mountaini
X
July 02, 2015 4:10 AM
Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Olympics Construction Scars Sacred Korean Mountain

Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Xenophobia Victims in South Africa Flee Violence, Then Return

Many Malawians fled South Africa early this year after xenophobic attacks on African immigrants. But many quickly found life was no better at home and have returned to South Africa – often illegally and without jobs, and facing the tough task of having to start over. Lameck Masina and Anita Powell file from Johannesburg.
Video

Video Family of American Marine Calls for Release From Iranian Prison

As the crowd of journalists covering the Iran talks swells, so too do the opportunities for media coverage.  Hoping to catch the attention of high-level diplomats, the family of American-Iranian marine Amir Hekmati is in Vienna, pleading for his release from an Iranian prison after nearly 4 years.  VOA’s Heather Murdock reports from Vienna.
Video

Video UK Holds Terror Drill as MPs Mull Tunisia Response

After pledging a tough response to last Friday’s terror attack in Tunisia, which came just days before the 10th anniversary of the bomb attacks on London’s transport network, British security services are shifting their focus to overseas counter-terror operations. VOA's Henry Ridgwell has more.
Video

Video Obama on Cuba: This is What Change Looks Like

President Barack Obama says the United States will soon reopen its embassy in Cuba for the first time since 1961, ending a half-century of isolation. VOA White House correspondent Luis Ramirez reports.
Video

Video Hate Groups Spread Influence Via Internet

Hate groups of various kinds are using the Internet for propaganda and recruitment, and a Jewish human rights organization that monitors these groups, the Simon Wiesenthal Center, says their influence is growing. The messages are different, but the calls to hatred or violence are similar. VOA's Mike O’Sullivan reports.
Video

Video US Silica Sand Mining Surge Worries Illinois Residents, Businesses

Increased domestic U.S. oil and gas production, thanks to advances known as “fracking,” has created a boom for other industries supporting that extraction. Demand for silica sand, used in fracking, could triple over the next five years. In the Midwest state of Illinois, people living near the mines are worried about how increased silica sand mining will affect their businesses and their health. VOA’s Kane Farabaugh has more in this first of a series of reports.
Video

Video Blind Somali Journalist Defies Odds in Mogadishu

Despite improving security in the last few years, Somalia remains one of the most dangerous countries to be a journalist – even more so for someone who cannot see. Abdulaziz Billow has the story of journalist Abdifatah Hassan Kalgacal, who has been reporting from the Somali capital for the last decade despite being blind.
Video

Video Texas Defies Same-Sex Marriage Ruling

Texas state officials have criticized the US Supreme Court decision giving same-sex couples the right to marry nationwide. The attorney general of Texas says last week's decision did not overrule constitutional "rights of religious liberty," and therefore officials performing wedding services can refuse to perform them for same-sex couples if it is against their religious beliefs. Zlatica Hoke reports on the controversy.
Video

Video Rabbi Hits Road to Heal Jewish-Muslim Relations in France

France is on high alert after last week's terrorist attack near the city Lyon, just six months after deadly Paris shootings. The attack have added new tensions to relations between French Jews and Muslims. France’s Jewish and Muslim communities also share a common heritage, though, and as far as one French rabbi is concerned, they are destined to be friends. From the Paris suburb of La Courneuve, Lisa Bryant reports about Rabbi Michel Serfaty and his friendship bus.
Video

Video Saudi Leaks Expose ‘Checkbook Diplomacy’ In Battle With Iran

Saudi Arabia’s willingness to wield its oil money on the global diplomatic stage appears to have been laid bare, after the website WikiLeaks published tens of thousands of leaked cables from Riyadh’s Ministry of Foreign Affairs. VOA's Henry Ridgwell reports.
Video

Video In Kenya, Police Said to Shoot First, Ask Questions Later

An organization that documents torture and extrajudicial killings says Kenyan police were responsible for 1,252 shooting deaths in five cities, including Nairobi, between 2009 and 2014, representing 67 percent of all gun deaths in the areas reviewed. Gabe Joselow has more from Nairobi.

VOA Blogs