MRA is a national shame

“Mr. Speaker, Sir, as the Honourable Members are aware, domestic revenues for the 2011/12 fiscal year were projected at K242.5 billion comprising K203.5 billion tax revenues and K38.97 billion non- tax revenues. The target for the mid-year was that a total of K115.6 billion, comprising K96.1 billion tax revenues and K19.5 billion non-tax revenues would be collected. I am pleased to report to the Honourable House that, as at 31st December 2011, domestic revenues performed exceedingly well above the target.

“Domestic revenues amounted to K120.1 billion against a target of K115.6 billion, representing an overall over-performance of K4.5 billion. Tax revenues amounted to K103.8 billion against a target of K96.1 billion, thereby posting an over-performance of K7.7 billion.” These are the words of Dr. Ken Lipenga, at the time Minister of Finance and Development Planning—now Minister of Finance—delivered in his well-received 2011/12 Revised Budget Statement at Parliament Building in Lilongwe on February 10 2012.

It turns out that these figures were sexed-up by a commercial loan that the shameless Malawi Revenue Authority (MRA) illegally contracted to sustain its target-beating record that was only being achieved in the pre-zero-deficit budget (ZDB) days.

These figures were then fed to the naïve and hapless Lipenga who may or may not have known that of the total domestic revenue MRA claimed to have collected, K15 billion was unlawfully borrowed and pushed into Government’s Account Number One.

But the fact remains that Lipenga used those lies to back the disaster that is the ZDB dreamed up by one Bingu wa Mutharika, now late.

Said Lipenga in his supplementary budget statement touting the success of the ZDB: “Mr. Speaker, Sir, as a result of strong performance in domestic revenues as well as prudent management of expenditures, the zero-deficit budget performed well above expectations. Recurrent expenditures were K120.05 billion against total domestic revenues of K120.09 billion, implying that domestic revenues exceeded recurrent expenditures by K40 million. Basing on a definition that recurrent expenditures are financed from domestic resources while development budget expenditures are financed from both domestic revenues as well as foreign receipts, then clearly the zero-deficit budget has so far been achieved. To the end of the fiscal year, the budget process is expected to continue performing well considering that expenditures are normally lower than revenues in the second half of the Fiscal Year. This is based on historical and empirical data.”

Even when legislator George Nnesa revealed this scam in Parliament, Lipenga denied the claims with the help of ruling party noise makers who booed and shouted at Nnesa.

Now, Lipenga is a career spinner. He spinned for Malawi’s second president Bakili Muluzi as press secretary and later did the same as Information Minister. He sexed-up messages for the late Mutharika also as Information Minister during the departed leader’s first few months of his first term.

Lipenga of all people, a communications expert, a doctor of letters and a wordsmith, should know that words do matter. And they did on Monday when he admitted that there was some truth to claims that the MRA borrowed about K15 billion from commercial banks to portray that it had surpassed its revenue target.

Lipenga, however, said his ministry was still investigating to get the truth about what really happened. And those words, spoken either to impress donors that this new administration is here to clean up the old one’s litter or spoken candidly and innocently, may be his undoing.

But as we rightly call for Lipenga’s resignation letter in our in tray for not seeing the error as the political head of the ministry that oversees MRA, the whole management team at MRA should also pack and go—at least temporarily—pending investigations into their conduct regarding this matter. I mean, who gave these folks the mandate to borrow on behalf of Malawians? It is only the Ministry of Finance which has that authority. And who is going to pay for the interest rates charged on that loan? MRA is a public agency that is funded by government. Even if it pays the loan from its allocation, that is an extra drain on our scarce resources we cannot afford. What other games does MRA play on Malawian taxpayers? That has to come out too given all the complaints about the conduct of the authority’s officers in the course of their duty.

Joseph Mwanamvekha, the sacked Secretary to the Treasury who was the technical head, should be smoked out from wherever he is—to use his late appointing authority’s words—and be held accountable for the role he may or may not have played in this shenanigan. Even the person heading the Revenue Division in the Ministry of Finance must step aside to pave the way for investigations.