Chief economist gives testimony in K2.4bn Cashgate case filled with economic jargons

The High Court in Lilongwe on Monday heard a lot of economic jargons when the State prosecutors paraded its third witness in the case former Ministry of Finance budget director Paul Mphwiyo and other are accused of plunder of public resources at Capital Hill.

Mphwiyo and his lawyers coming out of court.-Photo by Mphatso Nkhoma, Nyasa Times

Former Accoutant General Kandonje whpo is amongst the accused , coming out of court. with his lawyer-Photo by Mphatso Nkhoma, Nyasa Times

Standing in the witness box in the High Court, Daniel Jenya a chief economist working in the Ministry of Finance,  who first testified as defence witness number six witness for  convict  MacDonald Kumwembe in the case of  conspiracy to murder Mphwiyo , reappeared testifying exactly what he earlier told the court  in the shooting case with few new developments and contradictions.

Jenya’s testimony was more of technical and theory as he took the court in class of economics telling them what inflation is, meeting International Monetary Fund targets, Domestic borrowing, interests rate of both domestic borrowing and international borrowing and its effects to the country

He told the court that in 2013 his ministry started to notice bad trends in the accounting system as government was borrowing excessively.

Jenya said in that financial year alone government had domestic debts grossing K900 billion and K1.6 trillion from foreign debtors by mid0year and its interest rate at K175 billion in total with K171 billion for domestic debts and K4 billion for foreign debts.

He said  instead of reducing the stock of domestic borrowing as agreed to meet the target of IMF, by 2nd August, 2013 it increased from K 205 billion to K213 billion with an increase of K8 billion.

“The cost of domestic debt was way higher than the foreign debt,” he told the court, saying the situation was not “an ideal trend” for domestic borrowing.

Jenya and it was at this point that he began to engage with his supervisor Mrs Ketty Msukwa and Director Mr Juwao.

According to Jenya there was an increase again in the second week of August as of 8th August 2014 above the target of K46 billion targets they expected to borrow in three months as one of the condition they were given by the IMF.

When asked by state top prosecutor Mary Machala if he spoke to Mphwiyo about the rise of figures, Jenya told the Court that he never spoke to him and he wasn’t sure as well if his director Mr Juwao or his supervisor who is now deceased Mrs Ketty Msukwa talked to him.

This contradicts what he earlier told the court when he appeared as defence witness number six for Kumwembe as then he told the Court that he reported the matter to his boss who asked Mphwiyo to explain why the expenditures were high for the month of July and August.

Director of Public Prosecution Mary Kachale asked the witness to explain what an ideal trend for domestic borrowing.

He said it is “borrowing as low as possible or not borrowing at all.”

Mphwiyo started refuting the figures which Jenya was giving, claiming that if the figures were indeed high the country should have seen rising inflation.

He said he instructed Jenya to conduct an analysis to find the reasons why inflation was not rising if expenditures were high.

Jenya also disclosed that other notable activities between July and August 2013 was the fact that arrears which were supposed to be spent in the second quarter of the 2013/2014 financial year of K8 billion were all spent in the first quarter of the financial year with over K7 billion spent between July and September 2013 figures which are different from what he told the Court.

Jenya will continue giving testimony on Tuesday.

The state is expected to parade over 30 witnesses to the case which Mphwiyo and 17 others are charged with conspiracy to defraud government, holding property belonging to government, theft, money laundering, fraudulently issuing 24 cheques worth K2.4 billion, abuse of public office and usage of proceeds of crime.

Mphwiyo’s shooting outside the gate of his Area 43 residence in Lilongwe on the night of September 13 2013 led to revelations of the plunder of public resources at Capital Hill widely known as Cashgate.

Other suspects include civil servants such as former Accountant General David Kandoje, Auzius Kazombo Mwale, Clemence Mmadzi and Roosevelt Ndovi. The list of suspects also includes contractors.

Others are George Banda, Michael Mphatso, Samuel Mzanda and Maxwell Namata who are facing charges of fraud, negligence by public office, money laundering, theft by public servant, theft by servant and conspiracy to defraud government funds amounting to K2 446 817 450.49.

Former President Joyce Banda ordered a forensic audit undertaken by British firm, RSM ( formerly Baker Tilly), covering the period between April and September 2013. The audit established that about K24 billion was siphoned from the public coffers through dubious payments, inflated invoices and goods or services never rendered.

In May 2015, a financial analysis report by audit and business advisory firm PricewaterhouseCoopers (PwC) also established that about K577 billion in public funds could not be reconciled between 2009 and December 31 2014.

However, the K577 billion figure was later revised downwards to K236 billion by another British forensic auditor.

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5 thoughts on “Chief economist gives testimony in K2.4bn Cashgate case filled with economic jargons”

  1. Real Patriot says:

    Malawi a dead country..People are competing on how to loot this poor country.Nobody cares about this country..shame indeed.

  2. Kuchakachika says:

    This is why people should earn their money honestly and should also leave withing their means. You see how Kandoje akuchakachika after cash gate money stopping flowing. Too bad! Lots of people suffer because of these greedy people.

  3. Zatonse says:

    Kodi dress code kulibe ya ma lawyer? Thats a casual suit

  4. mphanke says:

    Kondonje, wangometano ngati venda, phanke!!! Ndiwedi mbava!!!

  5. Madala says:

    You, the high court people, you are to be economists soon.

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