3 DPP gurus arrested

Former Reserve Bank of Malawi Governor Dalitso Kabambe and former Finance Minister Joseph Mwanamvekha together with Democratic Progressive Party (DPP) Thyolo Central legislator Ben Phiri spent a night in the cooler following their arrests on Tuesday and Wednesday.

Mwanamvekha was arrested on Tuesday while Kabambe and Phiri surrendered themselves on Wednesday.

In a telephone interview on Wednesday , Mwanamvekha’s lawyer Mercy Chijere said she had filed an application for bail, but was not sure when the suspects would be taken to court. However, we were unable to talk to lawyers representing Kabambe and Phiri.

Said Chijere: “I have not yet had time to speak with my client or the police on how the matter will proceed. So, I am filing the bail application first and then will wait to see how things will progress.”

National Police spokesperson James Kadadzera in a statement on Wednesday said Kabambe and Mwanamvekha committed an offence of abuse of office and false accounting contrary to Section 335(A) of the Penal Code.

“The two, while serving as Minister of Finance and Reserve Bank Governor, respectively, procured and masterminded the falsification of gross liability and net reserve base returns with intent to make the International Monetary Fund [IMF] believe that the Government of Malawi was meeting conditions connected to the extended credit facility [ECF],” he said.

Kadadzera said the scheme resulted in IMF suspending ECF to the prejudice of ordinary Malawians.

At the end of his mission to Malawi in October this year, IMF director of African Department Abebe Aemro Selassie said the fund was “seriously” concerned about a misreporting case on some of the targets during the implementation of the cancelled ECF under the DPP regime.

Apparently, the previous administration allegedly misreported on several occasions on gross reserve assets (GRA) and net international reserves (NIR) for the period between 2018 and 2019.

Both GRA and NIR are managed by the central bank under the leadership of the governor.

According to the IMF, reserve assets consist of financial instruments available to the central bank for financing or absorbing an imbalance of payments or for regulating the size of such imbalances.

RBM can use reserve assets, for example, to preserve confidence, to satisfy domestic legal requirements, or to serve as collateral for borrowing abroad.

Most critically, reserve assets determine some important aspects of the relationship between the IMF and member countries, including what quota a country is allocated and can be basis for a country’s eligibility to draw on its reserve tranche and to use fund credit.

As for Ben Phiri, who was also former minister of Local Government, Kadadzera said he was arrested for alleged fraud and corruption at the Ministry of Gender between 2018 and 2020.

DPP spokesperson Shadric Namalomba, in a statement issued on Wednesday, described the arrests as politically motivated and bent on distracting people’s attention on challenges facing Malawians.

He said: “It is no secret that the Tonse government has failed Malawians who voted them for Canaan without sufferings. Instead of acknowledging the role of such Malawians who are providing them with alternative ways to govern the country and manage the economy, they are busy arresting them.”

Mwanamvekha, a DPP legislator for Chiradzulu South, is harbouring ambitions to contest at the DPP’s next convention as a presidential candidate. Kabambe, who joined active politics late last year, is also in the running to replace former president Peter Mutharika as DPP leader and torch bearer in the 2025 general elections.

Their arrests follow a warning issued by Attorney General Thabo Nyirenda on Monday that those that cooked-up figures to IMF took part in the sale of then wholly owned State bank, Malawi Savings Bank will be traced.

Danwood Chirwa, a Malawian professor of law at the University of Cape Town in South Africa, has since downplayed the arrests of the three.

He said Malawi has become a specialist in making arrests without prosecution.

Chirwa observed that since last year numerous arrests were made, but that no further action has been taken to ensure prompt prosecution and trial.