Cash-strapped Malawi pays SADC K1 billion membership dues

Malawi’s  cash-strapped Democratic Progressive Party (DPP) government, in the absence of donor support and a weak revenue base, has honoured its commitment to the Southern Africa development Community by paying close to US$2 million (MK1billion) in outstanding membership dues.

The amount, paid on Tuesday, is 0.1% is of Malawi’s MK930 billion 2015/16 national budget.

Nyasa Times has in possession a document that proves the payment.

In the infamous Cashgate scandal, an estimated $20- to $100-million went missing from government funds through a systemic scheme by public servants and fictitious companies where monies where paid out for gods and services not rendered or delivered.

As a result of Cashgate, foreign donors put on hold $150-million for the 2013-14 fiscal year. An estimated 40% of Malawi’s annual budget is donor-funded.

And Minister of foreign Affairs and International Cooperation George Chaponda also confirmed during a news conference at the Gaborone International Convention Centre that Malawi has settled its obligations to SADC.

“What is important is that we have paid what has accumulated in years,” said Chaponda and evading the question of how long the ‘debt’ had been outstanding.

Article 26 of the SADC Treaty stipulate that SADC’s funds shall consists of contributions of members states, income from SADC enterprises and receipts from regional and non-regional sources.

International media on Monday reported that Malawi’s financial crisis had indirectly persuaded President Peter Mutharika to stay at home, because Malawi had failed to pay its contribution of almost $2 million on time, but promised that the money would reach the SADC secretariat by the end of summit on Tuesday.

“That’s not true. The President failed to come because of pressing issues at home and he personally communicated that to the SADC leadership,” Chaponda said.

But Chaponda conceded that Malawi was “passing through a difficult period”.

Mutharika has repeatedly said the decision to cut aid to his impoverished southern African nation has contributed to “economic hardships”.

The country suffered another blow earlier this year when severe floods left more than 170 people dead and 200,000 homeless, as well as severely damaging infrastructure. Malawi is seeking $80 million from donors for reconstruction.

In February Mutharika pleaded with the World Bank for more aid, saying his country was in “desperate need of donor support”.

Donors have said the aid will only be restored when the government implements sound financial management systems to seal loopholes that enabled civil servants to collude with business figures and politicians to steal state funds.

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