7 March 2017

Malawi: When Pundits Recycle Rumours As Facts: Malawi Cashgate Suspects Are Not Former President Joyce Banda's 'Close Associates' - A Rejoinder to Gerhad Anders

Photo: Nyasa Times
Joyce Banda, former president of Malawi
guest column

Blantyre — In an article published on 8 February 2017 on allafrica.com , Dr. Gerhard Anders raises much curiosity when he passionately writes that Malawi's "Cashgate" suspects are "close associates" of former President Dr. Joyce Banda.

For the most, because this narrative is based purely on political rumour mongering that should not form the basis of any objective and credible analysis by a pundit of Dr. Anders' rank, especially when such unfounded publication occasions or perpetrates serious reputational damage.

To be clear, Dr. Anders' sources are of suspect credibility, and no amount of repeat publication should lend credence to the falsehood this allegation carries. A cursory fact-check through inquiries with both sides of the issue, which Dr. Anders clearly omitted to do, should have revealed that the suspects in the corruption scandal are in truth neither former President Banda's associates or friends, nor relatives for that matter.

To begin with, former President Joyce Banda has never met Mr. Paul Mphwiyo personally. She has never personally known, met or spoken to former Accountant General Mr. David Kaneohe and former Assistant Director Mr. Leonard Kalong. It is therefore wrong to call them her 'close associates'.

Corruption an Old Age Vice In Malawi

Since 'IFMIS' was installed in 2005 by the Government of late president Bingu wa Mutharika, government money had been stolen in Malawi between 2005 and 2012 including by high-ranking officials of that government. A few examples bear the fact out.

The then Secretary to the Treasure, one Dr. Milton Kutengule was arrested by the Anti-Corruption Bureau (ACB) in relation to fraud of public resources. A mysterious MWK20 million bank account in his sole name was discovered.

It was widely reported that the account was opened on a scheme in which the then Finance Minister, Goodall Gondwe was complicit. The account was meant to be a repository of money pilfered from government resources. The Financial Intelligence Unit (FIU) had warned Reserve Bank of Malawi that huge sums of money were being illicitly siphoned from government. In February 2012, two months before Dr. Banda became President, former Reserve Bank of Malawi Governor Dr. Perks Ligoya officially wrote former President, the late Mutharika, to alert him that people were stealing government money on a large scale. That letter was published in the media in Malawi and that the issue has been in public domain.

The late Mutharika promised to act, but never did until his demise two months later. Similarly, the later President Bingu wa Mutharika is himself reported to have amassed unexplained wealth in the region of MWK61 billion during his first term in office as Head of State. Indeed, most of the now know Cashgate suspects and convicts had already accumulated vast wealth from the same system long before Dr. Banda became president in 2012. They could not have built factories and multimillion kwacha mansions that they owned with money stolen during the few months of the scandal during Dr. Banda's presidency. Dr. Gerhard Anders who appears to have an enduring interest in Malawian affairs and who has conducted an ethnographic study of experiences of civil servants in Malawi must no doubt be aware of these issues.

Dr. Joyce Banda's Unprecedented Fight Against Corruption

The verifiable facts of the Cashgate scandal and its aftermath abundantly dispel the logic of the alleged association between Dr. Banda and the suspects. It was Dr. Joyce Banda's administration that boldly ushered in the new fight against chronic corruption, fraud and abuse of public resources in Malawi.

Her efforts were largely successful and she must have set a precedent for future governments to follow and build on. Former President Dr. Joyce Banda demonstrated unprecedented personal political will and commitment in fighting corruption, unlike her immediate both predecessor and successor.

Banda's efforts were premised on a clear understanding that economies which are afflicted by a high level of corruption do not prosper and often worsen the gap between the poor and rich.

During the last week of August 2013, Dr. Joyce Banda was alerted by the European Head of Delegation, Ambassador Alexander Baum, about possible abuse by public officers of the Integrated Financial Management Information System (IFMIS), an IT system used by the Government of Malawi. Ambassador Baum informed President Banda that he believed IFMIS had serious loopholes, which some public officers were taking advantage of to steal government money.

Dr. Joyce Banda made a public announcement at an Economics Association of Malawi (ECAMA) Annual Conference in Mangochi on September 7, 2013 that her government would be reviewing IFMIS to ensure its integrity and to prevent pilferage of taxpayers' money through fraud. She also made it clear at various public meetings that anyone involved in stealing public funds would be arrested and that there would be no sacred cows.

A few days after that, several public officers were found with unexplained millions of Kwachas in their homes and car boots. They were the first people to be arrested for what later became to be known as 'Cashgate' in Malawi. These arrests were shortly followed by the shooting of former Budget Director in the Ministry of Finance, Mr. Paul Mphwiyo, on the night of September 13, 2013 just outside the gate of his house in Lilongwe Area 43, Lilongwe.

Unlike her predecessors and successor faced with a similar situation, Dr. Banda immediately took decisive steps to deal with the situation:

  1. On 16th September 2013, following the arrest of the first Cashgate suspects and the shooting of Mr. Mphwiyo, President Banda met Army Commander, Inspector General of Police and National Intelligence Bureau Director and alerted them that she was going flat out in the fight against theft of public funds. It was during that meeting that she announcement the appointment of Mr. Nelson Bophani, then Deputy Inspector General of Police, to lead a criminal investigation team to speed up investigations into the 'Cashgate" scandal and present weekly progress reports to the nation without let or hindrance.
  1. President Banda then dissolved her cabinet and dropped two cabinet ministers to pave way for investigations and re-appointed a new cabinet.
  1. She established a new Ministry for Good Governance and appointed Minister Chris Daza as Minister. Banda also instituted a seven-member Ministerial Committee, which was chaired by Minister for Good Governance and whose primary mandate was to draw up a comprehensive work plan for dealing with corruption and plunder of public resources and the work plan was shared with the donor community in Malawi.
  1. With the help of the British Government, she initiated a forensic audit into cash-gate and engaged an internationally-renowned audit firm, then trading as Baker Tilly, to conduct the forensic audit. The Baker Tilly Audit Report was released on October 30, 2014 complete with names of the people involved in the Cashgate scandal. The Audit Report is a public document, which is accessible to all who would claim to have interest in the incidence of corruption in Malawi, including Dr. Anders.
  1. This was the first time a government in Malawi had instituted such an audit with the sole purpose of definitively dealing with widespread plunder of public resources. Crucially, former President Dr. Joyce Banda is not mentioned anywhere in that report.
  1. Further, former President Banda invited Dr. Maxwell Mkwezalamba who had relevant qualifications and experience in public finance management to give up a good job at the International Monetary Fund (IMF) and take up the position of Minister of Finance. This appointment was for the strategic purpose of helping her government to strengthen the capacity of the Ministry of Finance in cleaning up the Cashgate mess.
  1. Appreciating that the malaise required the widest national support and public scrutiny, Banda invited opposition party leaders, faith and civil society leaders to State House to seek their input in the fight against theft of public resources and brief them on the steps being taken to bring all the culprits to book.
  1. As a result of these measures, 72 people were arrested and many bank accounts were frozen. A good number of them have been convicted and sentenced while others are still answering charges related to cash-gate to-date. It is important to note that all Cashgate suspects who are being tried today under the new DPP administration were arrested during President Banda's PP administration.
  1. An even crucial fact is that the then Chief Cashgate suspect, and now a convict, Mr. Oswald Lutepo fled to China when law enforcers wanted him for questioning. At that time, President Banda was in New York attending the UN General Assembly. While in China, Mr. Lutepo wrote a letter to President Banda apologizing for his role in the theft of public money. Former President Banda has this letter on record and had Dr. Anders sought to hear her side of the story, as objective and ethical analysis would require, he could no doubt have been availed this letter, if he so wished. President Banda and her government pursued Mr. Oswald Lutepo and brought him back to Malawi in November 2013 to face the law. If President Joyce Banda was indeed involved, and if Mr. Lutepo were her close associate as Dr. Anders would have his readers believe, is it not a matter of common sense that she would have made efforts to ensure Mr. Lutepo remained in hiding in China?
  1. Furthermore, former President Joyce Banda did not use any Cashgate money for her election campaign. The former President has friends globally who mobilized financial resources for her campaign. These friends included women across the African continent. These women actually came to Malawi during the 2014 elections in solidarity with the fellow woman.

Current Regime's Desperate Efforts to Implicate Dr. Joyce Banda In The Cashgate Scandal

 It is worth mentioning that the narrative on which Dr. Anders pegs his so-called analysis is a well calculated political ploy by the current regime to implicate former President Dr. Joyce Banda.

When the then Chief Cashgate suspect, and now convict, Oswald Lutepo, was brought back from China, he was arrested in November 2013. He changed his statements about his involvement in the scandal so many times that even the Honorable Attorney General Kalekeni Kaphale said there would be no way Mr. Lutepo's statements would be credible and relied on. Despite having been arrested in November 2013, it was on November 21, 2014, (one whole year down the line!!!), when he stated during a radio interview that he was sent by Dr. Banda to steal money from government.

By contrast, and Dr. Anders may wish to note that, during a public inquiry aired live on local television networks and radio stations in Malawi, Mr. Paul Mphwiyo whose trial Dr. Anders terms "toughest, most high-profile" informed the Public Accounts Committee (PAC) of Parliament under oath that he never gave any money to Dr. Joyce Banda.

Further, is it not curious even to Dr. Anders, that all the suspects that are reported to have implicated Dr. Banda did so for the very first time after the Baker Tilly Audit Report was released on 30 October 2014 and it was noted that Dr. Banda is not mentioned in the Report as had been wished by some quarters. Further, as a pattern, all the suspects only started implicating Banda one and a half years after their respective arrests!

Former President Joyce Banda has written evidence of the current government's agents putting pressure on Mr. Oswald Lutepo to implicate her or risk having his wife and daughter arrested. It appears to be the case that as part of the same ploy by the current regime, some suspects were promised reduced jail terms and convicts were promised pardon such as late Senzani. There are also some government officials who were being persuaded to implicate the former President. Some of them have alerted Dr. Joyce Banda and they are willing to testify about this under oath.

President Banda's Absence from Her Country

In Africa, it is not unusual for a former leader to step aside and take on other projects immediately after leaving office. Former President of South Africa, Thabo Mbeki and former President Festus Mogae of Botswana served as Distinguished Fellows at the Woodrow Wilson Center. Former President Rupiah Banda of Zambia attended a former presidents' program at Harvard University. Former President of Malawi, Bakili Muluzi went to live in the United Kingdom for three years when he left office. This right applies to both men and women former leaders.

Similarly, President Joyce Banda is serving as Distinguished Fellow at the Woodrow Wilson Center and the Center for Global Development in Washington DC, USA. She is researching on Girls' Education and African Women's Participation in Leadership. She has already published an essay 'An Agenda to Fight Harmful Traditions for Girls Education'. She is currently working on publishing a book on the same, a project she is set to finish midyear 2017 and will return to Malawi immediately after.

Yet in his so-called analysis, Dr. Anders, perhaps uninformed about this widespread practice, would recklessly join and adopt the bandwagon insinuating that former President Banda is away to evade arrest by the authorities in her country.


Former President Joyce Banda has been a victim of media trials and political persecution based on concocted narratives by the current regime. The Mutharika administration has levelled of baseless allegations against former President Joyce Banda. She has been accused of involvement in Cashgate. In a desperate attempt to substantiate this allegation, regime officials have claimed that there is a CCTV footage showing convict Oswald Lutepo sharing Cashgate money with Dr. Banda at State House when the CCTV system at the official presidential residence was not functional during the entire time that Banda was President. The Anti Corruption Bureau in Malawi has asked the Malawi Government several times to provide them with the alleged CCTV footage to no avail simply because it does exist.

They have accused Banda of an attempt on the current President's life when he was arrested for treason in 2013, and the murder of his late brother President Bingu wa Mutharika. Current President Mutharika and top officials of his government have instituted a futile witch-hunt campaign against her and vigorously searched for any leads and evidence that would result in her arrest. To their chagrin, to date they have not found anything to support their machinations, for the simple reason that such evidence does not exist and Dr. Joyce Banda was not involved with culprits in Cashgate.

Yet Dr. Anders is happy to perpetuate a narrative that is based on political rumour mongering whose sole purpose is nothing more than causing reputational damage to Dr. Banda. Dr. Joyce Banda did not only publicly acknowledge the existence of the problem. She also made sure that the culprits were brought to book and stolen resources were recovered. Her administration worked on strengthening accountability institutions and finance management systems to make sure that the evil of misusing public resources should never happen again in Malawi. Banda pushed for the strengthening of the law, which demands financial probity from public officials through declaration of their assets and liabilities. Her administration reviewed and strengthened this legal instrument to give it the teeth that it lacked hitherto. Under the revised law, public officers are required to declare their assets both on assuming and leaving public office. Former Presidents who are still presidents of political parties are also required to declare their assets every year. Dr. Banda still declares her assets every July. Her administration did what was humanly possible to demonstrate that it was concerned about the need to protect public resources and could therefore have been trusted as a safe custodian of not only citizens' property, but most importantly their lives

By sharp contrast, the administration of her successor, President Peter Arthur Mutharika has shown lackluster approach and failed to take decisive action on numerous fraud allegations, including the MK577 billion fraud audit report, and perhaps most disturbingly, the recent Zambia maize scandal, the scandal about farming tractors procured from India, the TEVETA scandal and UN peacekeeping soldiers' missing allowances scandal, among others. Just recently, a search by the Anti-Corruption Bureau (ACB) at a cabinet minister's house in the capital Lilongwe found stashes of millions of hard cash in various currencies suggesting money laundering offences. While the Minister concerned has since been fired for his alleged corrupt involvement in the procurement of maize from Zambia to deal with a national deficit, President Mutharika is coy to permit the law to take its course on the minister who is his crony. In all these matters, there is enough information and evidence of wrongdoing by certain individuals to provide any serious government with the impetus to investigate.

It is the expectation of Malawians that President Peter Mutharika government will follow in footsteps Dr. Joyce Banda's government in the fight against corruption, by instituting open and transparent investigations into the looting of government resources, especially the MK577 Billion Price Waterhouse Coopers report, which has been in progress since 2014 but is being swept under the carpet. It should be concerning to anyone interested in the affairs of Malawi that the zeal and concrete steps that were initiated by Dr. Joyce Banda have tremendously waned under the current administration.

Had Dr. Anders cared about objective and fair analysis that should characterize a pundit of the rank he should be, he would have easily obtained the foregoing account and tremendously improved the fact base of his analysis. Unfortunately, Dr. Anders was happy to publish his musings without hearing former Dr. Joyce Banda's side of the story.

Tusekele Mwanyongo is Press Secretary in the Office Of The Former President Dr. Joyce Banda



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