Money from Malawi jet sale cannot be traced

It does not rain but pour for the cashgate riddled Joyce Banda government as it has been embroiled in another ‘jetgate’ scandal with published reports saying the $15 million (about K6.3 billion) proceeds from the sale of the presidential jet have vanished.

Reserve Bank of Malawi (RBM) has no record of the money and Treasury also confirmed that the jet proceeds never reached the Consolidated Fund or what is sometimes called Government Account Number One domiciled at RBM where all public revenue goes.

The Nation on Sunday newspaper  reported that the central bank—which receives all government funds originating from foreign sources—has been asking Office of the President and Cabinet (OPC) about the jet money without getting a concrete response.

 President Banda : Jetgate
President Banda : Jetgate

The paper which quoted sources reported that the revelations raise questions as to who received the jet proceeds that the OPC said would be allocated as follows: $5.8 million (K2.4 billion) to Malawi Defence Force (MDF) for peace-keeping operations; $4.2 million (K1.8 billion) for the Farm Input Loan Programme (FILP), $4 million (K1.7 billion) for buying medical drugs and $1 million (K420 million) for procurement of legumes and maize.

The paper stated that main players in the management of public funds—RBM and the Ministry of Finance—ducked its questions on the matter.

RBM spokesperson Mbane Ngwira said on Friday that Capital Hill was in a better position to respond. Treasury publicist Nations Msowoya did not respond to the paper’squestionnaire while his boss, Maxwell Mkwezalamba, referred the paper to the Ministry of Information.

On his part, OPC spokesperson Arthur Chipenda said: “The $15 million realised from the sale of the presidential jet did not necessarily need to be deposited into Government Account Number One, which is a kwacha denominated account. This would have meant converting the $15 million into kwacha and yet government was to use the proceeds for activities that required use of forex such as purchase of medical drugs. If the proceeds were deposited into Account Number One then government would have been required to convert the funds into forex again to purchase the drugs. The proceeds, therefore, went into a government foreign account so that it would be easier to use the forex and not externalise any forex. This is just an accounting matter.”

But the  government has no Foreign exchange Denominated Account (FDA) anywhere in the world, according to what the papers source said.

Former finance minister Friday Jumbe described OPC’s claims that the jet proceeds were deposited into an offshore account instead of Account Number One as “a serious anomaly, unprocedural and smacks of a high degree fraud.”

Jumbe speaking to Nation on Sunday said since boarding of government assets is authorised by the Ministry of Finance, it is surprising that the proceeds are not in the Consolidated Fund and that Treasury as well as RBM do not appear to know where the funds are.

He explained that  said all government money—whether from within or outside Malawi—must be first deposited into Account Number One at RBM before transferring it elsewhere.

“No single person, not the State President, not OPC, not even the Minister of Finance, would decide where to keep government’s money. “If the jet money did not appear in Account Number One, then government is breaking the law and that is serious illegality. Any expenditure of money that is not coming from that account is illegal,” said Jumbe.

Government sold the jet in July last year to Bohnox Enterprises, a British Virgin Islands- based firm a subsidiary of Paramount Group. Paramount Group, Africa’s largest privately owned defence and aerospace company, is owned by Ivor Ichikowitz, whose family foundation paid British public relations firm Bell Pottinger to spruce up President Joyce Banda’s cashgate soiled image.

The paper reported that  OPC has been pressurising RBM to transfer billions of kwacha to Paramount Group without supporting documents after the central bank recently transferred an equivalent of K5.2 billion to Paramount for military equipment .

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