Foreign Affairs ministry caught at nexus of forex fraud through RBM

Some officials at the Ministry of Foreign Affairs and International Cooperation and the Reserve Bank of Malawi (RBM) have been caught pants down in what clearly appears to be a case of money laundering and forex externalization.

Nyasa Times is in possession of a signed document authorizing the payment of USD76,516.64 or MK 61, 508, 617.35, part of which is apparently under the alias of compensating a former Malawian embassy employee in Brazil who is currently resident in Malawi.

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Spokesperson for the Ministry of Foreign Affairs and International Cooperation Rejoice Shumba said in a brief response to Nyasa Times that the said document is authentic and that there was nothing wrong about the transaction.

“Yes, it is true. It is a normal transaction,” said Shumba without further explanation.

According to communication from the Secretary for Foreign Affairs addressed to Ambassador in Brazil and copied to the ministry’s Foreign Mission Section and dated 4th June 2021, an amount of USD 39,439.73 from the total amount was paid to Ben M’bwana Phiri as Foreign Service Allowance (FSA) arrears from November 2013 to December 2016.

The communication co-signed by Deputy Director of Finance Dennis Siti and Grace Chatha Gama, the ministry’s Deputy reads: “Please be advised that the Reserve Bank of Malawi has externalized funds to your mission as follows: Amount of Foreign Currency…USD76,516.64, Malawi Kwacha Equivalent…MK61,508,617.35, Exchange Rate…803.8594, Month…May, 2021-PE. Note: USD 39,439.73 FSA Arrears for Ben M’bwana Phiri from November 2013 to December, 2016.”

Mbwana currently lives in Malawi but one wonder why RBM would send the money to Brazil.

What raises eyebrows again, is the initial amount, which is not explained in respect of its intended use, except for M’bwana’s FSA below. The ministry’s spokesperson could not divulge any information.

A governance expert told Nyasa Times in Lilongwe on Wednesday that the diplomat deserves to be paid his arrears but wondered why it had to take 38 months before government could pay him.

“It is surprising that someone stayed 38 months without pay and he is being paid four years later. Something may not be adding up and the ministry needs to explain this,” said the expert.

Similarly, he said, one wonders why the ministry still decided to externalized the much sought after forex when it could have simply paid him in Malawi where he is now in local currency.

But another expert said there might be nothing wrong since he was entitled to the money while he was in Brazil, where he also possibly holds a bank account.

He said the concerned diplomat may have been denied his FSA as an enforcement of recall. Now that he was finally recalled, government still holds the obligation to pay him through the same bank account and avenues they used when he was still at the mission.

“For reporting and documentation purposes, they might be doing that to regularize their books and hoping that all this money is being paid to the diplomat. Paying him in Kwacha simply because he is in Malawi would not ideal ideal and would raise audit issues down the line,” the expert who also once served as a diplomat in US, preferring anonymity.

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2 years ago

Additionally, the money has to be paid through the Embassy Budget not the central MoFA budget according to practice and procedure

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