Minister of Finance Ken Lipenga has been cleared of any wrongdoing by the cabinet committee inquiry on the Malawi Revenue Authority (MRA) K30 billion loan scam, State Vice President Khumbo Kachali told Parliament on Thursday.
Kachali, who chaired the cabinet committee which was probing the issue, presented the report Parliament and said they found Lipenga innocent, arguing he did not sanction the authority to borrow from commercial banks.
The report implicated former secretary to the treasury Joseph Mwanamvekha to have played a pivittal role in ensuring the illegal loans were obtained.
Kachali said MRA borrowed the money to paint a rosy picture of revenue collection for the hastily implemented zero-deficit budget to show that it was on track in terms of local resources to finance recurrent expenditure.
“The motive of borrowing was to show that zero-deficit budget was working,” Kachali told the House as he read the report.
“The decision was based on political rather than economical,” he said.
Kachali said the “decision to borrow was illegal” and that “it did not follow the procedure.”
“It was done without prior knowledge of the minister,” said Kachali.
The Vice President said MRA borrowed money from the Malawi Savings Bank (MSB), NBS Bank Limited, Standard Bank, the National Bank of Malawi (NBM) and Indebank Limited at the end of December last year and paid it back in January this year with interest.
Kachali said there was K48 million total interest rate from the loans.
He also said “Inde Bank and Standard Bank had charged arrangement fee which amounted to K12 million.”
The VP said “the total cost of borrowing to around K61 million.”
“Unfortunately this matter has cost the nation in two ways, the Public image of Government both locally and internationally and the amount of monies spent totaling K61 million in servicing the loans,” Kachali told parliament .
During questions time, former ruling DPP leader in the House, George Chaponda asked why did the committe not include independent members unlike cabinet ministers who had “conflict of interest” like former finance minister Ken Kandodo.
Chaponda also questioned if Mwanamveka was given a fair hearing .
Kachali said Mwanamveka was given a conducive environment, disclosing that “we even had dinner together.”
The scam was first brought to light in February this year by Malawi Forum for Unity and Development (Mafunde) president George Nnensa who claimed in Parliament that he had evidence MRA borrowed the money from National Bank of Malawi, NBS Bank, Standard Bank, Indebank and Malawi Savings Bank Limited at the end of December 2011.
Nnensa, who is Balaka South parliamentarian, reported the money was repaid in January this year with interest at the end of December 2011.
ZDB was former president Bingu wa Mutharika’s brainchild towards economic independence after he fell out with donors and development partners due to governance concerns last year. Traditionally, donors support the country’s national budget with resources estimated at 40 percent.Follow and Subscribe Nyasa TV :