Patients bring candles to Malawi hospitals as graft scandal hits budget

by Karen Sanje | Thomson Reuters Foundation
Tuesday, 18 March 2014 08:35 GMT

School children are transported along a Malawi road, April 21, 2008. Bicycles are a cheaper means of transport for rural residents. REUTERS/Siphiwe Sibeko

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A corruption scandal, known locally as “cashgate” has led Malawi’s key donors to withhold millions of dollars in budget support

Weeks after his official payday, primary school teacher Chafwakale Chirwa Khungwa has almost forgotten that he is on the payroll of the Malawian government. He is too busy scratching a living from side jobs to make ends meet.

Recent revelations of high-level corruption have prompted the government to shut down its payment system to investigate allegations of theft by officials, delaying payment of salaries to teachers, nurses and doctors.

The graft scandal, known locally as “cashgate” has also led Malawi’s key donors to withhold millions of dollars in budget support to a country that relies on foreign aid for about 40 percent of national expenditure.

The impact has been felt across Malawi. Patients have been asked to bring candles and torches to hospitals when the power is cut, and, like Khungwa, teachers have taken side jobs to pay their bills.

The exact amount of money siphoned from government coffers in one of Africa's poorest nations has not yet been determined.

The government's Financial Intelligence Unit (FIU) estimated that government officials stole up to 20 billion Malawi kwacha ($44 million) between April and September 2013, salting away funds without supporting documentation or receipts. The cost of official government expenses is also under scrutiny and there is evidence of outright embezzlement by politicians and civil servants, the FIU said.

A separate forensic audit from the firm Baker Tilly Business Service Ltd, commissioned by the British government’s Department for International Development (DfID) indicates that 13.6 billion Malawi kwacha (about $30 million) was stolen between April 1, 2013 and Sept. 30, 2013.

The cashgate scandal came to light in September, following an assassination attempt on then Budget Director Paul Mphwiyo, who is believed to have been targeted because of his bid to end financial corruption within government ranks. In response, donors have withheld up to $150million of budget support, leaving critical public services reeling.

"My daughter went into labour but when I called for an ambulance, they asked me to contribute towards fuel for running it because the hospital had not received enough allocations,” said Stella Suzi of Nkhata Bay district. “We have been asked to contribute candles or torch batteries to be used whenever there is a power cut."

Khungwa, the schoolteacher from a rural area in the central district of Dedza, said he has gone unpaid for weeks after the government payday. He said he now spends most of his time doing piecework instead of teaching to cover his essential living expenses.

"I teach for a whole month but I don't get my salary when time comes for me to be paid. My landlord expects that I will pay him for the house I rent once the month ends, but where do I get the money to pay him?” he asked. “He would not understand if I told him that I haven't been paid because government would be considered the last institution to delay payment for its staff."

"I also need to eat and support my relatives. They know I am working and their expectations on me are high. But how do I do that when I haven't been paid my salary? I would rather keep my class idle and fetch some piecework so I get money to meet my needs."


Staff in government departments have seen payment of their salaries delayed since September when details of the corruption scandal began to unfold.

The worst periods for civil servants were in November and January when they waited nearly three weeks, until the 18th of the following month, before getting paid for the previous month’s work. The official government payday is the 27th of each month.

Several senior and junior members of staff from the government's accounts department and politicians connected to the ruling People's Party (PP) of President Joyce Banda have been implicated in the corruption scandal.

Budget director Paul Mphwiyo was shot three times outside his home, but survived the attack. It was thought he was about to reveal the fraud within government ministries.

Police have arrested former a justice minister, Ralph Kasambara, on charges of masterminding the shooting.  They also have arrested PP director of recruitment Oswald Lutepo, who is among 70 people facing charges linked to the scandal. The charges filed against him say his companies were used to process some of the dubious government contracts.

Police found government officials with cash stashed in the boots of their cars or in their homes, and investigators allege the money was stolen by taking advantage of loopholes in the government's central computerized payment system, the Integrated Financial Management Information System (IFMIS).

Sarah Sanyahumbi, the head of the U.K.'s DfID in Malawi, told Thomson Reuters Foundation the donor community had had doubts about the viability of the government's financial management system and said donors would only unlock the aid to Malawi after the government had put its finances in order.

Minister of Information and Civic Education, Brown Mpinganjira would not link the unpaid salaries of civil servants directly to the corruption scandal and withholding of donor aid.

"Sometimes it is a question of responsible officials delaying the process to prepare documentation that leads to the payment of the salaries," Mpinganjira in an interview.

However, he could not explain why these delays were coming directly after the financial scandal and the withholding of funds by major donors, such as Britain, Norway and the European Union.

John Kapito, executive director of the Consumers' Association of Malawi (CAMA), said despite investigations at senior levels of government, corruption was endemic at local level because politicians were not held to account.

"Malawi needs to understand that corruption and misallocation of resources will continue slowing the growth of this economy, pushing all Malawians into poverty," said Kapito.

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