Cash-gate affects SMEs—Mlombwa

The Capital Hill cash-gate will adversely affect indigenous businesses because government is the largest institution that procures services and products from Malawians, Indigenous Business Association of Malawi (Ibam)  president Mike Mlombwa said.

In an interview on Wednesday in Lilongwe, Mlombwa said cash-gate will derail most businesses because government is taking time to pay for services and award contracts to small-scale businesses.

Since revelations were made that some civil servants were stealing government money, some small-scale businesspersons have complained that  dealing with government has become difficult.

They allege that getting payment for services they delivered to government  is taking long, hence the loans they took from banks  are attracting high interest rates.

Said Mlombwa: “I am of the conviction that this scam is not only involving Malawians. In this country, we have foreigners who deal with government by providing services and products, but nobody has been picked. According to our statistics foreign companies take 90 percent of governments businesses and Malawians scramble for the remaining 10 percent and yet nobody has been arrested.”

He said that since the scam was unearthed, locally owned businesses are having difficulties to deliver services and products to government and even access payment.

“Everything is at a standstill and our members are complaining that their businesses have been negatively affected. My advice to government is that they must critically look into the flaws of the Integrated Finance Management Information System (Ifmis) and replace it with a proper technologically advanced product,” said Mlombwa.

“The President has admitted that the Ifmis has got flaws and why are they still keeping it? They must replace it if civil servants are using it to siphon out money,” said Mlombwa.

But Minister of Industry and Trade Sosten Gwengwe differed with Mlombwa saying no business is suffering because of the suspension of the Ifmis.

“Government has never done over-the-counter transactions where one supplies goods and receives cash there and then. As government we have suspended the Ifmis and all the transactions are now done manually. Manual system is slow but that does not mean that if one supplies goods to government he will never be paid,” he said.

Gwengwe said government has the interest of small-scale indigenous traders at heart and seek to support and ensure the survival of small-scale businesses.