Lawyers cite corruption as budget hurdle

Malawi Law Society (MLS) says failure to tame corruption and fraud remains the major hurdle towards the successful implementation of the proposed 2017/18 National Budget.

MLS made the statement in Lilongwe yesterday during a National Budget Analysis Breakfast sponsored by NBS Bank where stakeholders analysed the proposed budget Minister of Finance, Economic Planning and Development Goodall Gondwe tabled in Parliament last Friday.

In his contribution, MLS president Khumbo Soko urged authorities to ensure accountability to the governed to gain their trust and confidence that their funds are being prudently spent.

He said: “When you govern, you govern by trust and for people to have confidence that their money is well spent, there is need to end corrupt tendencies.”

Chipping in, former Reserve Bank of Malawi (RBM) deputy governor (economic services), Naomi Ngwira, said it was disheartening to read in the media on a daily basis that millions of taxpayers’ funds are being stolen and yet people sweat to pay the taxes.

She said: “You struggle to pay taxes and everyday you read someone has stolen it, but when it comes to meting out punishment, it is just a soap opera. This is really sad.”

In March this year, Gondwe confessed that fraudulent acitivities, if left unchecked in government, threatened to derail implementation of projects outlined in national budgets.

Reports have been rife of widespread corruption in the public sector, with former Director of Public Prosecutions (DPP) Fahad Assani stating in the mid-2000s that at least 30 percent of revenue collected to finance the budget goes down the drain into individuals’ accounts.

During the March interview, Gondwe said he was happy that at central government level, efforts have been undertaken and loopholes in the Public Finance Management System have been sealed.

He said: “Fraud will always be there despite how tight public financial management systems are. So, there is going to be fraud, but we are happy that the Cashgate [plunder of public resources through dubious contracts and payments] type of fraud has been curbed, a lot of it has been curbed.”

In their contributions to the budget breakfast, Economics Association of Malawi (Ecama) president Henry Kachaje, Institute of Chartered Accountants in Malawi (Icam) Taxation Committee chairperson Andrew Chioko, Icam Taxation Committee member Audrey Mwala and Soko asked government to put in place checks and balances to reduce pilferage, which they said has the potential to frustrate taxpayers.

Mwala wondered how Malawi will grow its economy by seven percent when most economies in the region are projected to grow between three and four percent.

She said: “If this growth is to be achieved, it means that we have to do business unusual because some of the poverty in Malawi is self-made.

“Even in times of plenty, we see some of our crops, especially fruits, going to waste. If we value-add our crops and search for more markets, then government can increase its revenue generation base.”

Mwala also urged government to put in place stringent measures, especially in district and town councils to tame pilferage.

The panellists also commended government for allocating more resources to sectors such as agriculture, education and health. However, they also felt the energy sector also deserved huge allocation of resources as it drives the economy.

In his Budget Statement, Gondwe said the International Monetary Fund (IMF) indicated a global economic growth rise from 3.1 percent in 2016 to 3.4 percent in 2017 and that it is projected to continue to grow by 3.6 percent in 2018; reflecting a strong economic rebound in advanced economies and a marked pickup of economic activity in emerging and developing economies.

Conspicuously missing during the budget breakfast were representatives of Ministry of Finance, Economic Planning and Development. The meeting was told the officials could not attend because of other pressing engagements.

Parliament’s Budget and Finance Committee chairperson Rhino Chiphiko, civil society organisations (CSOs) representatives and a cross-section of economists were among those in attendance. n