jet money vanishes

President Joyce Banda sold the jet whose proceeds cannot be traced
President Joyce Banda sold the jet whose proceeds cannot be traced

The $15 million (about K6.3 billion) proceeds from the sale of the presidential jet have vanished, with Nation on Sunday investigations revealing that both fiscal and monetary authorities never received it.

Two highly placed sources from the Reserve Bank of Malawi (RBM) on Thursday separately confided that the central bank has no record of the money.

Another well placed source at 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.

One of the RBM sources explained: “There is no single transaction that hit the RBM dollar account or any other account of the bank from presidential jet proceeds.”

The other source corroborated, saying the central bank—which receives all government funds originating from foreign sources—has been asking OPC about the jet money without getting a concrete response.

“At one of the meetings on Tuesday [last week], the very same question about the whereabouts of the presidential jet proceeds was raised.

“Ideally, when money is received from anywhere outside Malawi, we expect it to hit the account of government at RBM, but as I am talking to you today no single money from the jet sale ever hit the RBM dollar account,” said the source.

On his part, the Ministry of Finance source said only OPC can explain where the money went because “Treasury certainly did not receive it and RBM tells us that they never got it.”

These revelations raise questions as to who received the jet proceeds that the Office of the President and Cabinet (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.

Apart from the question of who received the money, there is also the matter of where the funds are and no one in government appears ready with the answers.

Throughout last week, main players in the management of public funds—RBM and the Ministry of Finance—ducked Nation on Sunday’s questions.

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 our questionnaire while his boss, Maxwell Mkwezalamba, referred Nation on Sunday 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 one of our RBM sources said yesterday that government has no Foreign exchange Denominated Account (FDA) anywhere in the world.

“Government has one main account and that is Account Number One at RBM and five other operating accounts, which they use when transferring money from Account Number One for operations.

“All foreign money, donor aid, grants, loans come into the country through RBM and it is the central bank that gives government the kwacha for operations. The forex forms part of the country’s foreign reserves. So, where is this government foreign reserve account held?  If the jet money had come into the Reserve Bank account, we could have seen a significant increase in the country’s foreign reserves.”

In an interview yesterday, 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.”

He 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.

Jumbe 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 that Nation on Sunday investigations revealed to be 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.

Meanwhile, our sources say OPC has been pressurising RBM to transfer billions of kwacha to Paramount Group without supporting documents.

The RBM sources said a few months ago, the central bank transferred an equivalent of K5.2 billion to Paramount for military equipment and that there are now fresh directives from OPC to pay more to the South Africa-based firm, but which RBM is now reluctant to execute.

“The pressure is raising concern within the bank. On Tuesday [last week], three instructions from OPC were issued to pay more money to Paramount Group, but there are no invoices issued. The decision to pay has been pended waiting for the direction from the governor [Charles Chuka],” said one of the RBM sources.

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22 Comments - Write a Comment

  1. Avatar

    Koma anthu ena amangobadwa zitsiru bwanji! How can the so-called observer link this high levels of fraud to campaign or de-campaign? Mbuli ikamalamulira mbuli nzinzake zotsatira zake zimakhala zimenenezi. This is a country of dunderheads, madeya and we are all fools. If we had a working parliament ths fool cld hv been impeached lng time ago and sh wld b rotting at ZA maximum prison by now. Am happy kuti 20 May sipatali even though ther z no guarantee kuti sikubweranso chitsiru china. Fotseki. I hope the pple at RBM are aware that if they do illegal things they wl b answerable to our laws. Zoti mayi wakuba uja amatiumiriza is not an excuse.

  2. Avatar

    What facts do u need apart frm the ones presented here? Do u know the meaning of speculation? If government ikutsutsa what has been written here let them present their evidence tothe contrary to the nation. They are the ones with papar work of all what they hav bn doing. This is the worst government we hav had. Even Muluzi was better than this fraudster.

  3. Avatar

    It was pretty obvious from the beginning that this will not end well. First, contrary to her words, Our Lady of Wisdom was very reluctant to sell the plane. Then she started flying in the same plane after it was “sold”. Then we heard that some of the cash from the sale will be used for “peace-keeping” — an adventure fully funded by the UN. Now this …..

    Why should OPC put pressure on RBM to refund a dubious “well-wisher” billions of kwacha?

    Anyways, well done The Nation. Please keep digging. Only a beneficiary of cashgate would have problems with this story.

    1. Avatar

      Madam, with all these scandals, MCP should be off the scale….out of reach for these scandal mongers in this election but due to incoherent messaging, lack of specificity you are caught up in a dog fight now with all these losers!! You will lose unlosable contest. Frustrating! Contact me to sharpen your messaging guys!

  4. Avatar

    Chakwera alowe basi…. uchitsilu wachuluka. this isnt about gender, its simply a fact that this particular person who is malawi’s president right now is stupid and hell-bent on doing evil. thats it. she must be expelled.

  5. Avatar

    Boma ili ndiye latikwana. It must go out of state house at all cost. Instead of thinking how to help Malawians, all it thinks is how to steal.

  6. Avatar

    Let us not beat about the Bush. A couple of days ago we were notified that a huge amount of public money was stolen through dubious means, signatories of these transactions were named, the organisation utilised as a conduit was revealed, why should organisations/government departments pretend to be ignorant and yet they are the ones who were in the forefront administering these deals? The army was the easiest means of channelling their proceeds with the blessing from the army’s leadership and it is not therefore strange that the same people fought hard to have the unrefined Joyce Banda to be sworn in and implicate innocent individuals on baseless charges in order for them to steal big time from Malawians. Everybody involved should be told to account for the anomalies and deficiencies noted. Some of us were surprised with the big tummies these people developed within the two years they have enjoyed the stolen public monies leaving their relatives dying of hunger and lack of drugs in hospitals. Akatsekeredwe agalu amenewa basi, in fact their Chief Swindler hasn’t much long at the helm.

  7. Avatar

    this is the heavy mistake the government has made. that is if the story published is true. the govt should make sure that the proceeds have come to account number one if not we need our jet.

  8. Avatar

    This is a serious scam. Bring back the jet. Kuba ayi. Observer and Joseph please this is no joking matter where one can parade stupidity or shallowness.

  9. Avatar

    The only way Malawians will get to know the whole story and also got back their stolen money, is to remove Mrs Banda in office in May. We cannot afford to be indifferent at this daylight robbery of our resources. To all my friends here, our role is certainly to ensure that the PP machinery does not take advantage of our brothers and sisters’ ignorance by spending time to enlightening them what is really going on in this country. This administration has crossed the line and disappointed big time as some of us expected better.

  10. Avatar

    Really if we say that Police have apprehended all suspected looters including one Big Fish, Kasambala. Why are we still getting report of big looting in Government? This shows that the police got wrong people, the real looters are still in Government, with the involvement of RBM. They are continuing to loot unabated, while fooling the public! Cry my beloved country

  11. Avatar

    Ladies and Gentle men, the Madam President ndi dilu. I do not know what will happen if we give her another 5 yrs, she will steal everything

  12. Avatar

    Our Parliament is the most stupid in the world. The Parliamentarian dont even know what their Government is doing. The opposition is sleeping. Imagine a Parliament which agrees to sell their only plane and use the money to buy maize, fertilizer and drugs ( consumables), then after consuming kuphwisa ndi kukanyera. Zoona. What type of Economics is this. Ndithu dziko lopanda ndi ndege ndi imodzi yomwe today when during Kamuzu Banda Malawi had over 4 planes in 1970s-80s. Why not demonstrate against this useless lady president today. Malawians lets claim our Jet back.

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