Leader of the opposition United Democratic Front (UDF) Atupele Muluzi is asking President Joyce Banda administration to urgently issue a statement on how it intends to deal with donor’s withholding of budgetary support due to cashgate scandal.
Foreign donors said on Thursday they are withholding budget aid to Malawi unless the government got serious about rooting out widespread corruption and restoring fiscal discipline.
Speaking to reporters at his residence in Blantyre after donor’s statement, Muluzi who last Sunday met President Banda at Sanjika Palace last Sunday to discuss ongoing investigations into the Capital Hill cash-gate in the face of threats by donors to delay budgetary support, said government should explain the clear measures it has taken following the development.
Donors are not scheduled to disburse pledged aid until next February following an IMF review, but they warned on Thursday that the next aid tranche depends on government efforts to fight the rampant corruption.
“We will not be able to resume support through government systems until we have a clear assurance, independently verified, that our resources are all being used for their intended purpose,” said Sara Sanyahumbi, who heads the donor grouping which includes European countries, the European Union and the World Bank.
“Now is the time for the government to take the initiative, take the action that is needed to address the weaknesses in the systems,” she added.
Atupele noted:“It means there will be huge gaps in the public purse. It will not be possible to run government with such a huge gap. This calls for tough choices and decisions.”
He said government has to come up with a clear plan on how it will ensure that public services do not grind to a halt.
“The decision has far reaching consequences such that next administration will be affected,” said Muluzi who is also the presidential candidate for his UDF party in the 2004 polls.
He said the decision by the donors “is a clear indication that they cannot trust us with their money because we have failed to manage out limited resources”.
Muluzi said he fails to understand how huge sums of money can be drawn from government without the Reserve Bank knowing.
“The Governor of Reserve Bank of Malawi should perhaps resign to pave way for thorough and independent investigations,” he said.
Muluzi said the Integrated Financial Management Information System should not be used as a scapegoat in the cash leak at Capital Hill.
“It is only a computer system operated by technicians under instructions from managers and cannot say today that the managers new nothing about the illegal transactions. Who authorized those payments?” he queried.
“Government must make a statement on this matter, especially with regards to implications on the national budget.
“Government should involve Parliament in this process and during the current sitting the Minister of Finance should also inform the House where cuts are going to be made to finance government business,” he said.
Finance minister Maxwell Mkwezalamba said the suspension of budget support spells doom for the country.
“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 $150milliona and if it doesn’t come which is likely to the case, this means we have to have another look at our budget framework,” he said.
According to Sanyahumbi, who is also the country head of Britain’s Department for International Development (DfID), the plunder of state funds had “seriously dented the confidence in the government’s financial management system.”Follow and Subscribe Nyasa TV :