Malawi to trace cashgate tainted assets, says Mutharika as German calls for recovery

Malawi President Peter Mutharika has promised the opposition leaders to recover the money embezzled by the  looting of public purse in what has been known as the “cash-gate” corruption scandal.

Western donors, who provide about 40 per cent of the country’s budget, stopped payments after the scandal erupted in September 2013.

Mutharika said government will trace all the money embezzled and forfeit cashgate tainted properties through a due process of the law.

“I have appointed a new anti-corruption head,” Mutharika said. “I am sure he will do everything to trace this money and also try to recover and very soon you will see progress in the prosecution of Cashgate.”

One of the major development partners Germany has said it wants the full recovery of money that was stolen through cashgate to resume budgetary support to Malawi.

“We are much interested in the recovery of money and the arrest of the culprits,” German Ambassador to Malawi Peter Woeste told Capital Radio, a private broadcaster.

A Malawian court on Tuesday slapped a former senior official with a three-year-and-nine-month jail term, the first such sentence in the infamous cashgate scandal.

Treza Namathanga Senzani, a former principal secretary in the Tourism Ministry, was convicted of money laundering and theft.

Woeste described the verdict as “a victory for the rule of law.”

However, he on resuming aid to Malawi “we first of all have to see how the appeal goes because the process is an ongoing one, secondly we always said which is very important to all of us is the recovery of the stolen assets.”

Top government officials siphoned billions of Malawi kwacha from the government Integrated Financial Management System (IFMIS) through payments to companies that did not supply goods and services to government departments and ministries.

Germany envoy said Malawi government has to seal all loopholes first to warrant aid resumption.

“No one would put money into a bucket that has holes and is still leaking,” he told Capital Radio.

The drama began in September 2013  when Paul Mphwiyo, the then  budget director and the person former president Joyce Banda  had tasked to close the loopholes in the public purse, was shot three times in the head in Lilongwe. Miraculously, he survived the attack and is amongst state witness in his shooting case.

Ralph Kasambara, former minister of Justice, has been accused of orchestrating the assassination attempt of Mphwiyo and if facing charges related to that. He is also facing separate money laundering charges together with chief suspect Oswald Lutepo.

Some 60 cashgate cases are in the courts, and this week the justice minister Samuel Tembenu indicated in parliament that more people involved in the plunder will be arrested.

The Anti Corruption Bureau (ACB) says roughly K20 billion went missing Banda’s two year rule. They add that probably another K90 billion went missing over the eight years of the presidency of the late Bingu wa Mutharika, equal to roughly $500m at the exchange rate of the time.

In total about 30 per cent of the country’s budget could have been looted over a decade – almost as much as donors have provided Malawi over the same period.