Lipenga committed ‘wilful shutting of one’s eyes to the obvious’

The Youth Association for Democracy (YADEMA) has followed with keen interest the developments surrounding the borrowing of K15 Billion by the Malawi Revenue Authority. From what we have gathered, the following comes out clear.

The law in S. 20(5)(b) of the Malawi Revenue Authority Act allows ‘the Authority’ to raise by way of loans from any source, inside or outside Malawi, such moneys as may be required for the discharge of its functions. However, this law makes it crystal clear that such borrowing is subject to the approval of the Minister. Marrying the above law to the facts as they unfold, three issues come out clear.

The first one is that it is only the ‘Authority’ which has got the powers to borrow. By ‘Authority’ the law talks of the Malawi Revenue Authority and the governing body of the Authority is the Board established under S. 8 of the Act. It is therefore only this Board which has got the powers to borrow. We hasten to point out the difference between the Board and Management.

Lipenga: Asked to resign

The latter which is headed by the Commissioner General is responsible for day to day operations of the Authority and the law makes it very clear that it is only responsible for the Management, as opposed to the raising of funds for the Authority.

Going by what was reported in the Nation Newspaper of the 11th of May, 2012, the Board of MRA has refuted ever authorizing Management to borrow the K15 billion. The short of it is that the said borrowing was illegal at law and Management acted beyond its powers when it did so.

The second issue is that even if, for argument’s sake we were to hold that it is the Authority that had exercised its legal powers to borrow, the law is clear that it can only do so subject to the approval of the Minister. The Minister responsible for MRA is the Minister of Finance. The said Minister, Hon. Dr. Ken Lipenga has come out in the open that he never approved the said borrowing and was not aware of it. We therefore come back to the same point that whoever was involved in the borrowing of this money did so illegally.

The third issue again for argument’s sake is to say even if we were to hold that the Minister had approved the said borrowing, the law provides that the borrowing can only be for the discharge of the functions of the Authority. From what we have gathered, the borrowing of the K15 billion by MRA was meant to show that the Zero Deficit Budget was working as evidenced by the over collection of revenue by the MRA. And yet, MRA does not collect its revenue by way of raising loans from the banks. The short of it all was that this illegal borrowing was done to cover up a lie to the nation which is not the functions of MRA let alone of any public body.

From the above analysis, it is obvious that Management of MRA acted illegal. There are consequences which follow when someone does something illegal. According to S. 17 of the MRA Act, the Chief Executive Officer of MRA is the Commissioner General and has general and specific duties under to perform. As we understand the law, he is the one to be held responsible for the borrowing which we have already concluded to have been illegally done. A person who acts illegally in the performance of his duties is said to be incompetent under the law.

The Board of MRA has got powers under S. 17(5)(b) of the MRA Act to terminate the appointment of the Commissioner General where it is established that he is incompetent in the performance of his duties. However, we are aware of the rules of natural justice and constitutional rights that you cannot condemn a person unheard .
We therefore call upon the Board of MRA to forthwith invite the Commissioner General of MRA to a disciplinary hearing in respect of the allegations which have been leveled against him pertaining the K15 billion borrowing, hear his side, appreciate and apply the law and make its decision on the matter.

Our second Conclusion on the MRA management borrowing without the approval of the Minister is that we call upon the Anti-Corruption Bureau to speedily institute investigations of abuse and/or misuse office, arrest and prosecute the officers who will be found to have processed the loans without the approval of the Minister.

We are aware of several cases where public officials who had allegedly done acts without the authorization of Ministers or their superiors are being prosecuted y the ACB for abuse of office under S. 25B of the Corrupt Practices Act. The MRA case is no different from such other cases and it is only fair for ACB to do what it did in similar cases to avoid being accused of discriminatory prosecution of alleged offenders.

The Minister of Finance is on record as having said that he did not know what was going on in respect of the K15 billion borrowing by the MRA. The duties of the Minister of Finance are clearly spelt out under the law when it comes to borrowing of money by government departments.

To begin with, under the Public Finance Management Act, the Minister of Finance has got general and specific duties. One of the specific duties is to oversee finances of statutory corporations, MRA being one. More importantly, he has the responsibility to the supervise finances, assets and liabilities of the State so as to ensure that a full accounting is made to the National Assembly of all transactions involving public moneys or the disposition of public resources.( Vide S. 4 of PFMA). Thus when the Minister was presenting to Parliament the issue concerning the K15 billion borrowing, he was performing one of his specific duties under the law.

More importantly, where as the law under S. 5 of PFMA allows the Minister to delegate his responsibilities, the same clearly provides that ‘The responsibility of the Minister under this Act shall not be derogated merely by his having exercised his power of delegation under this section.’

We therefore do not buy the Minister’s plea that he did not know what was going on when the law places specific responsibilities on him to know and do specific acts. Where he chooses to delegate his authority, as we understand the law, he is the one still liable to account for anything that might have gone wrong with the exercise of those delegated powers.

In any event, the Minister cannot be heard to say he did not know anything because when Hon. George Nnesa raised the issue in Parliament, that must have put the minister to knowledge and he ought to have given his ear to what was being put forward by Hon Nnesa. Indeed, he ought to have succumbed to Hon. Khwauli Msiska’s Motion that the matter be investigated to its logical conclusion. By proceeding with his presentation, the Minister committed what at law is known as ‘wilful shutting of one’s eyes to the obvious’.

The short of it all is that the Minister thus failed in his duties by not reversing the illegal borrowing when it was brought to his attention and he too must be held accountable for his deeds.

We are aware that under S. 97 of the Constitution, all Ministers are responsible to the President and it is only the Presidency which has got powers to hire and fire Ministers. It is clear to us that the Minister in issue failed to perform his duties as was expected of him by the law. We thus call upon him to humbly step down as Minister of Finance. If he does not do so, then we add our voice to those that have spoken before in calling upon Her Excellency to exercise her Prerogative Powers to fire the Minister of Finance for his misdeeds.

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