President Peter Mutharika’s lone Cabinet minister Goodall Gondwe has decried the plunder of public resources at Capital Hill, commonly known as Cashgate, saying the scandal has done Malawi much harm both domestically and internationally.
Speaking in an exclusive interview, Gondwe, who was appointed Minister of Finance and Economic Planning and Development on June 6 2014, said Cashgate has deprived funds to productive social sectors such as health and education, hence grinding the economy to a halt.
Said Gondwe: “Cashgate is a big harm and I will tell you that it has not happened elsewhere in the world apart from here in Malawi. Our economic image has been tarnished.”
Revelations of Capital Hill Cashgate followed the shooting of former Ministry of Finance budget director Paul Mphwiyo on the night of September 13 2013 as he drove into his yard in Lilongwe’s Area 43 suburb.
British forensic audit firm, Baker Tilly, estimated that about K13.7 billion in taxpayers’ money was siphoned from Capital Hill and the firm said the figure could be higher.
In November 2013, the country’s major donors under the Common Approach to Budget Support (Cabs) announced the withholding of their budget support totalling $150 million for the second quarter of the 2013/14 financial year (October to December), citing Cashgate revelations. To date, the donors have not yet rescinded their decision.
During the interview, Gondwe said Cashgate has greatly dented Malawi’s credit worthiness on the international scene.
He said: “When your image is tarnished like that, your name is not creditworthy and you cannot get credit and therefore you have to transact on a cash-basis.”
Gondwe also reasoned that the stolen money at Capital Hill could have been used to construct hospitals, public schools “and that has not been forthcoming. It’s quite catastrophic.”
He added: “But we can get over it. I will, however, not take time to look at who did what or to witch-hunt.”
Following Gondwe’s appointment as Cabinet minister, some critics, through newspapers and the social media, argued that Gondwe had no energy to manage the economy, considering his advanced age. He is 78.
However, Gondwe has hit back at the critics of his reappointment, charging that he is not too old to manage the economy.
Said Gondwe: “Quite frankly, I was surprised when I read in the papers that I am too old [to be the Minister of Finance again]. But I believe we need to take this economy back to the basics so that things should start working again. After that, I tell you that I will leave the show to you [young] guys.”
Gondwe, a former International Monetary Fund (IMF) director for Africa who also served as adviser to former president Bakili Muluzi as well as Cabinet minister to Muluzi’s successors the late Bingu wa Mutharika and Joyce Banda, was born in 1936.
Last week, IMF urged Mutharika to maintain some unpopular reforms started by Banda in May 2012 such as the flexible exchange rate and the automatic fuel price mechanism (APM) which it says “have served Malawi well and we would hope that both are maintained.”
Ahead of the May 20 Tripartite Elections, the Economics Association of Malawi (Ecama) also emphasised the need for the elected government to assess economic reform package by Banda and her People’s Party (PP) and maintain those that yielded positive results in the economy.