Voice of America (Washington, DC)

19 March 2014

Malawi: Jet Sale Puts Malawi's Government Under Scrutiny

Blantyre — The government of Malawi President Joyce Banda is facing pressure to reveal documents related to proceeds from the sale of a presidential jet to British Virgin Islands company Bohnox Enterprises.

The money from the $15 million transaction was to be used to buy maize and medicine for the country. Reports, however, are surfacing that the money is either missing or has been used to offset a military arms debt.

Malawians started to ask about the money after a local newspaper recently published a story on the issue. The story quoted sources in the Treasury as saying they could not trace how the funds were used because they were not deposited into the government's consolidated account known as Account Number One.

Several government authorities say the money was used for its intended purpose.

President Banda maintained her earlier stance during a recent press conference in the capital, Lilongwe.

"I was the one who said, 'Let's sell the jet,' but I didn't do it alone," she explained. "I presented the issue before the Cabinet meeting where we agreed that we should use the money for buying maize. We also agreed to buy military equipment for the peacekeeping mission in DRC, buying medicine and contributing to the farm input subsidy program."

When pressed on the matter, Finance Minister Maxwell Mkwezalamba said the money did not really go into the Treasury, but was used to offset a military arms debt, which the government owed to private defense firm Paramount Group, whose subsidiary is Bohnox.

"Instead of them giving us the $15 million for the presidential jet, we requested Bohnox, given their association with Paramount, to basically pay Paramount that amount," the finance minister said. "So that money never came."

Information Minister Brown Mpinganjira previously told reporters that the money was used to buy maize and military equipment and that some of it was used to finance the farm input subsidy program.

The contradictions have raised suspicion among members of the general public, including non-government organizations (NGOs) and opposition politicians who think the money may have been embezzled.

Legal experts also have argued that by bartering, the government contravened section 172 of the Malawi Constitution, which does not allow expenditures of government revenue before it is deposited in the consolidated account.

Jessie Kabwila is the spokesperson for the leading opposition party in parliament, Malawi Congress Party. She says the component of trading off does not hold water because the Public Financial Management Act does not allow barter as a form of trade.

She says that for claims of funding the United Nations Peace Keeping Mission to be viable, the government should produce an invoice claiming the refund of the money from the U.N. and another transaction from the U.N. acknowledging the same to the Malawi government.

A local rights NGO, Malawi Watch, has written the Attorney General and Minister of Information demanding the government supply documents and other proof relating to how the jet proceeds were utilized.

"Malawians are given very contradictory information which is forcing various stakeholders, including the opposition, to build a mountain on the same," said Billy Banda, the group's executive director. "And owing to that, we thought it would be much more prudent to request the Ministry of Information and the attorney general to provide transactions that followed the procurement of drugs, equipment for peacekeeping, and maize."

Mkwezalamba said it is doubtful the government can provide any information pertaining to the sale of the jet.

"We've been very open and transparent in terms of how this transaction was conducted. I am a bit surprised that even with all detailed information there is a need for more to be given," he said. "The documentation would be there but can we share it with you? I doubt it."

Defense Minister Ken Kadondo told local daily newspaper The Nation that the government cannot release documents concerning the purchase of military equipment because they are classified.

Representatives of NGOs under the Grand Coalition for the Defense of Democracy and Constitution are threatening to hold a nationwide demonstration should the government fail to produce documents of the use of the proceeds from the jet sale.

The group petitioned Banda following demonstrations in Blantyre last month. Among other issues, the petition calls for an immediate meeting of parliament to deliberate findings of the preliminary forensic audit report and the sale of the jet.

The president has yet to respond to their petition, although a 14-day ultimatum elapsed a week ago.

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