IMF Executive Board Completes First Review of Malawi's Three-Year PRGF Arrangement And Approves US$7.1 Million Disbursement

International Monetary Fund (Washington, DC)
February 24, 2006

The Executive Board of the International Monetary Fund (IMF) completed today the first review of Malawi's economic performance under a three-year Poverty Reduction and Growth Facility (PRGF) arrangement. This enables Malawi to draw an amount equivalent to SDR 4.9 million (about US$7.1 million).
The Executive Board approved the three-year arrangement on August 5, 2005 (see Press Release No. 05/188), for a total amount of SDR 38.2 million (about US$54.9 million) to support the government's economic program for 2005-2007.
In commenting on the Executive Board's discussion on Malawi, Mr. Takatoshi Kato, Deputy Managing Director and Acting Chair, stated:
"The Malawian authorities are to be commended for the satisfactory performance under the PRGF-supported program against the backdrop of a severe food crisis. This builds on the success of the staff-monitored program and represents a welcome break from previous episodes of recurrent fiscal slippages. Performance in some areas had, however, remained uneven.
In particular, the overvaluation of the exchange rate had put pressure on external reserves and had led to a persistent backlog of unpaid import invoices. In this respect, the Fund welcomes the more flexible exchange rate policy implemented recently by the authorities, as well as their commitment to avoid an overvaluation of the currency, phase out informal administrative restrictions and eliminate delays in import payments. The authorities' commitment to sustain a tighter domestic policy stance will also be of critical importance.
"The authorities' program is based on realistic fiscal objectives and they are to be commended for observing the budget limits and improving public expenditure management. In light of the food crisis, the emphasis in the budget on food security in the near term is appropriate, and the government's efforts, in cooperation with donors, to contain the food emergency deserves to be supported. Going forward, it will remain important to manage near-term risks to the budget carefully.
"Malawi could reach the completion point under the HIPC Initiative in mid-2006 provided further progress is made towards implementing the remaining triggers and the authorities remain committed to maintaining a more flexible exchange rate system free from administrative restrictions.
A final assessment of progress towards completing key social sector triggers will also be critical. Reaching the HIPC completion point would immediately allow Malawi to qualify for further debt relief under the Multilateral Debt Relief Initiative," Mr. Kato said.
The PRGF is the IMF's concessional facility for low-income countries.
PRGF-supported programs are based on country-owned poverty reduction strategies adopted in a participatory process involving civil society and development partners and articulated in the Poverty Reduction Strategy Paper (PRSP). This is intended to ensure that PRGF-supported programs are consistent with a comprehensive framework for macroeconomic, structural, and social policies to foster growth and reduce poverty. PRGF loans carry an annual interest rate of 0.5 percent and are repayable over 10 years with a 5½-year grace period on principal payments.

Foreign investors interested in Malawi mining industry
BY Anthony Kasunda05:50:46 - 21 February 2006

Ministry of Mines, Natural Resources and Environment says some foreign investors had shown interest and commitment to explore Malawi’s potential in the mining industry.Deputy Minister Jimmy Banda said this on arrival from African Mining Partnership (AMP) in South Africa, adding about 30 ministers resolved to promote artisanal and small-scale mining.Banda said Malawi had mineral deposits in a number of areas that could provide opportunity to those who want to seriously venture into mining.He said Malawi delegation took advantage of the meeting to discuss with other government officials and international mining companies to assist develop the country’s mining sector.“Discussions with member states centred on capacity building, training and exchange programmes,” he said. “One company has already submitted an application for an exploration licence in Malawi.”Banda said he held discussions with managers of, among other institutions; The British Geological Survey, MINTEK, Energem, SDV Transami of South Africa, Omega Corp of Australia, Mine Africa of Canada and BRGM of France.The deputy minister, however, said there was threat by European Union member states to stop buying minerals from Africa, a move he said would stifle the continent’s economies.Banda said the threat by EU to close market for African minerals by September had sent shivers in mining countries, including Malawi.A Cape Town communiqué made available by the ministry says EU countries were concerned with health and environmental degradation mining was causing.Banda said an agreement was made to lobby EU to ensure that Registration, Evaluation and Authorisation of Chemicals (Reach) have no negative impact on African countries.He said it was agreed that a sustainable mining strategy that addresses health and safety and environmental hazards should be developed.“The issue of finding an alternative market in Asia was discussed but it was turned down,” he said. “It was resolved that we use our parliaments and Commonwealth Parliament to lobby EU to continue buying our minerals.”The deputy minister said there was fear among participants that the close of EU market would result in loss of employment in both private and public sectors.“The meeting also reiterated their commitment to pursuing ways in which mining and minerals industry can significantly contribute to poverty reduction and eradication,” he said.

Waterway project raises $2.5bn
by Taonga Sabola, 23 February 2006 - 07:44:25

Prospects of having the Shire-Zambezi Waterway in the near future look promising as the project has netted $2.5 billion of the estimated $6 billion required to see it through.Victor Lungu, Director of Transport Planning in the Ministry of Transport and Public Works, said in an interview last week there are very high hopes of getting the balance because more people have shown interest in the project.“We just need to put in place proper institutional structures to get the remaining money,” said Lungu.He said the money is mainly coming from foreign investors—the Development Bank of Southern Africa (DBSA), the Amalgamated Banks of South Africa (ABSA) and International Finance Corporation (IFC), a development financing arm of the World Bank.Lungu said the local private sector’s response has not been all that encouraging. “But they [private sector] need to play an active role by investing in this project which will bring high returns in the future once operational,” he said.He added that his ministry will conduct a number of meetings with the private sector to enlighten them on the benefits of the project.Members of the private sector last year asked the authorities of the project to come up with a feasibility study before they can pledge their support. This is yet to be done.They also asked government to give a breakdown of the $6 billion project cost which they said was scaring.The local private sector expressed its sentiments during a meeting with port authorities organised in Blantyre last July to lobby for their support.The Shire-Zambezi Waterway project is expected to provide the shortest route to the sea for landlocked Malawi as it connects the southern district of Nsanje and Indian Ocean port of Chinde over a 238-kilometre distance.A short route to the sea will mean a significant cut in costs for Malawi’s imports and exports which are high due to equally high transport costs.The country has one of the highest transport costs in the world estimated to contribute 30 percent to cost of exports and 50 percent or above to import costs, representing about $175 million total annual import bill which is currently growing at a rate of 7 to 8 percent annually.The project has generated interest in the region as indicated by the visit of Common Market for Eastern and Southern Africa (Comesa) Director of Infrastructure Amos Marawa who inspected the waterway last October.Marawa said the project will benefit many countries as it will make Malawi one of the main transportation hubs in Comesa. He said it will also help countries like Zambia, Zimbabwe, the Democratic Republic of Congo (DRC), Burundi, Rwanda and Tanzania by providing access to Indian Ocean ports through the Mtwara, Nacala and Sena corridors.Zambia and parts of DRC are expected to benefit from the project through the rail connection from Mchinji to Chipata. Lungu said studies are underway to connect the now dormant Lilongwe-Mchinji rail line to Zambia.The Egyptian Government also promised to support the project. Its experts were supposed to visit the country last year but failed due elections in their country, according to Lungu.“It’s not that they have withdrawn their interest in the project. We are still discussing with them on when they can come and they should be able to visit the country any time within the first quarter of the year,” said Lungu.Construction of Nsanje Port started with pomp last October but halted due to the rains.

Govt allowed Muluzi to import vehicles
BY Frank Namangale
02:42:42 - 22 February 2006

Malawi Revenue Authority (MRA) Commissioner of Customs and Excise told the High Court in Blantyre yesterday they allowed former president Bakili Muluzi to import cars, among other items, duty free based on instructions from State House and the Finance Minister.The revenue collecting body, according to court records, claims the former president owes it K111 million. Muluzi, who is UDF national chairman, is said to have imported over 100 cars, 5,000 T/shirts, 2,500 caps, 90,000 meters of cloth and 2,000 wrist watches among other items duty free using Presidents Salary and Benefits Act. The witness, Funwell Mzunga said the law did not allow Muluzi to import the goods in question and extend them for use by other persons (in this case UDF), explaining that there was a belief that the goods were being imported for personal use.Mzunga said it was discovered later towards the end of 2004 that the goods were being used by UDF.He said when re-examined by the MRA lawyer, there was no inclination in the letters from the State House that the goods being imported were for personal use.The witness said written instructions from State House between March and May 2004 to let the goods imported by Muluzi enter duty free were getting to him through then Commissioner General Ernest Mtingwi.Mzunga said MRA’s Chief Legal Counsel Dominic Mpango wrote Minister of Justice on his behalf when the amendment of a law on Presidents Salary and Benefits Act was enforced in 1994, seeking clarification on a point where it says, “the President would be allowed to import goods duty free for personal use”.“I did not understand the term personal use. Before the amendment, the law said goods for use by the President would be imported duty free. But the Justice Minister said the law was in order,” Mzunga said.The witness was cornered earlier by Muluzi’s lawyer David Kanyenda on why he did not exhibit in his affidavits documents to the effect that Muluzi imported the said items.Kanyenda also put it to the witness that there was no evidence that in as far as the witness’s affidavits were concerned to show that Muluzi imported the goods.The lawyer challenged the witness to point out at one individual who used the goods imported other than Muluzi and the witness said he could only point at an institution, UDF. Earlier, MRA lawyers Henry Ngutwa and Mpango objected to the cross-examination of witnesses that was supposed to be done sometime back, arguing lawyers for the defendant notified them of their intention to cross-examine their witnesses and they did not seek the court’s leave.Mpango asked Justice Healey Potani to object to the cross-examination and sought the court’s indulgence to direct them.But Kanyenda argued that no prejudice had been occasioned to MRA and objecting them to cross-examine the witnesses would operate to defeat the course of justice. He said the delay in serving the notice came because Muluzi was in the UK receiving medical treatment and had problems to seek instructions.Judge Potani agreed with Kanyenda that denying them a chance to cross-examine the witness would make the court experience difficulties in arriving at a fair decision and he allowed Muluzi’s lawyer to go ahead cross-examining Mzunga.Other witnesses were not around and the court adjourned the matter to a date yet to be set.MRA last year in January impounded UDF vehicles for nonpayment of duty but Muluzi managed to get an injunction to force MRA return the vehicles and were given back to him.

Export boom to cut trade deficit—bank

by Frank Phiri, 13 February 2006 - 05:24:23

A widely expected boom in agricultural production, coupled with a favourable exchange rate and aid inflows, will help reduce Malawi’s trade deficit this year, the Standard Bank Group has forecast. In a blueprint report for Malawi, Standard Bank—Africa’s biggest banking unit by assets—expects export earnings to rise by more than K4 billion (US$35.1 million) over 2005. The bank projects that a decline in emergency external food purchases will moderate imports, traditionally higher than exports because of food deficits. Malawi has since the mid 1990s registered trade deficits due to poor performance of major export commodities, namely tobacco and tea. Tobacco alone fetches more than 60 percent of Malawi’s total foreign exchange income. While exports have been failing, imports concurrently rose, particularly during drought years, which necessitated large-scale imports of relief maize to feed the hungry masses. The overall result for many years has been a deficit in the current account—the measure of a country’s balance of payments position or the difference between earnings from exports and spending on imports. A breakdown of Malawi’s balance of payments positions by Standard Bank indicates that exports will fetch about K74 billion (US$ 571.5 million) in 2006, up from about K69 billion (US$ 536.4 million) in 2005. The value of imports is forecast at about K125 billion (US$ 963.6 million), which is about K2.6 billion (US$ 20 million) less than in 2005. “Besides the support to the current account from the resumption of donor funding, exports are expected to increase in 2006, assuming normal weather conditions and a more favourable local currency price,” the bank said. “Imports will also be stimulated by expected gradual higher growth, although the effect will be moderated by a fall in emergency food imports and international oil prices,” it added. But the bank forecast the trade deficit to deteriorate to near 2005 levels by 2007. Last year, the deficit was a negative K58 billion (US$ 447.3 million). Standard Bank notes that progressive years of negative balance of payment positions often led to erosion of gross reserves and undermined stability of the kwacha, which has been depreciating. It says the government has to its credit, identified a number of potential products in agriculture, mining and spin-off opportunities like agro-processing in a bid to increase the export base and stem the trade deficit. Identification of auxiliary opportunities backed by agriculture in various sectors of the economy comes in the wake of Malawi’s heavy but unhealthy dependence on tobacco, which now faces various market restrictions due to the anti-smoking lobby. Thanks to the African Growth and Opportunities Act (Agoa), which allows duty-free entry of goods into the United States from eligible African states, direct and indirect apparel exports have emerged as a viable foreign exchange spinner for Malawi. The share of apparel exports in total exports increased from four percent in 1999 to nine percent in 2003, said the Standard Bank. In Africa, major export destinations for Malawi are South Africa and Egypt—accounting for 14 percent and nine percent of market share. The others are US (13 percent) and Germany (11 percent). With most of these export destinations, Malawi registers a negative trade deficit.

Comment

Nobody should be paid tax payer's Kwachas for doing nothing
Youth Wise - 10th Feb. 2006

It is about time the president and the cabinet did something about the Vice President. Common sense tells us this. One needs not to be a politician or a trained analyst to arrive at such a conclusion. Once again some quarters are coming out now to claim the President shouldnt have done so.
In effect what this section of people are saying is that they condone non performance period, whether in government or elsewhere but yet government business is serious business affecting millions of poor Malawians.
This is the same mentality that is keeping Malawi and probably most of Africa underdeveloped.What is wrong with firing somebody who is not performing at all in their duties. To keep efficiency in any organization every person is assessed according to performance and if they do not perform up to standards these individuals are relieved of their duties. This is simply what the President has done.
Worse the office of the Vice President uses alot of resources of Malawians to keep its machinery working and to have a non performer in that position is an insult to any tax paying Malawian. I think we need a little growing up to do and take seriously issues affecting our country despite our political and religious affiliations.
Apart from non performance then comes the issue of insurbordination to the President. The Vice President is by law only allowed to serve the President and no one else but ofcourse its common knowledge that he only answers to the former President and UDF Chairman Mr Muluzi. This alone is treason, undermining the Presidency.
So yes let Dr Chilumpha accept his resignation and leave the office to somebody who can do the job effectively and serve the Malawian people better.

The Lake of Stars Festival

Feb 10 2006

1st - 3rd September 2006 @ Chintheche Inn, Northern Malawi, Africa

By Stephen Evans, icNorthWest

THE Malawi music festival is back. Set in southern Africa on the shimmering, palm-fringed shores of Lake Malawi, the Lake of Stars Festival has become one of the fastest growing events in sub-saharan Africa.

The last two years have seen Groove Armada's Andy Cato, DJ Yoda and Felix B from Basement Jaxx fly out along with around 200 people from all over the UK to fuse African and Western culture, all in the name of charity!

This year the word has spread throughout Africa with artists and festiver-goers alike coming from Kenya, Tanzania, South Africa and Zambia.

Headlining and hosting the event will be BBC 1Xtra's Ras Kwame http://www.bbc.co.uk/radio1/onemusic/ras/ Chibuku residents the Beat Monkeys, Phat Phil Cooper, Maverick Mitchell and Malawi stars Tikhu Vibrations, the Black Missionaries and Wambali, amongst others.

STA Travel have arranged discount flights with Kenya Airways at £620 inc tax. These must be booked through the Liverpool branch on Bold Street Tel: 0151 707 1123.

PLEASE NOTE THAT THE DEPOSIT FOR THESE GROUP FLIGHTS ARE £200 AND MUST BE PAID FOR BY 28TH FEBRUARY.

The remaining fee must then be paid for by the start of June. Alternatively, contact STA Travel to discuss other routes to Malawi.

You can fly to Cape Town, then travel overland and depart from Malawi from only £580 Or fly into Kenya, head to Zanzibar and the Indian Ocean, then work your way down to the festival and fly home for just £550.

For information and ideas on what to do whilst in Malawi please check out the festival website: www.lakeofstarsfestival.co.uk/

For more information please email info@lakeofstarsfestival.co.uk or call 0151 708 5051.

Chilumpha fired

by Olivia Kumwenda, 10 February 2006 - 05:57:05

President Bingu wa Mutharika on Thursday fired Vice President Cassim Chilumpha saying the veep has abandoned his responsibilities since he assumed his office. The President has since written a letter to Chilumpha informing him about cabinet’s decision for him to go and that he also accepts the constructive resignation. In the letter, which is in our possession, Mutharika has highlighted several issues relating to the alleged under-performance of Chilumpha. Some of the issues raised is that Chilumpha has not been attending cabinet meetings as required, has publicly criticised and attacked the same government he is part of and has not obeyed his (Mutharika’s) order that all government officials should move to Lilongwe. “You have instead deliberately disobeyed me and moved from your official house in Lilongwe to live at the Mudi House in Blantyre. In so doing, you have shown insubordination and arrogance that is not compatible with your office as Vice President,” reads the letter. Mutharika also said the VP had puzzled government and undermined his authority as the State President when he constantly attempted to run a parallel government by organising a number of public events and even political rallies without the President authorisation or even have the courtesy informing him. “Cabinet is, therefore, obliged to construe that by abandoning your responsibilities, you have accordingly resigned from your position as Vice President of the Republic of Malawi. I have, therefore, with deep regret, accepted your resignation,” writes Mutharika. Attorney General (AG) Ralph Kasambara has since withdrawn a case in the High Court in Blantyre where he wanted the court to declare that Chilumpha has by way of constructive resignation vacated his office as VP. “The Constitution of Malawi says a VP can leave office through death or resignation and resignation could be expressive and constructive and the issue of constructive arises due to conduct being displayed, so Chilumpha has resigned by conduct, he did not have to write,” said Kasambara on Thursday. According to Section 85 of the Constitution, if at any time both the office of President and First Vice President become vacant, then the Cabinet shall elect from among its members and acting President and Acting First Vice-President who shall hold office for not more than 60 days.

President of the Republic of Malawi Bingu wa Mutharika on Thursday fired vice president Cassim Chilumpha from government. Here is the letter he wrote to the Veep: The Right Hon. Dr. Cassim Chilumpha, SC, Office of the Vice President, P.O. Box 30399, Capital City, Lilongwe 3. Dear Dr Chilumpha, Re: YOUR RESIGNATION AS VICE PRESIDENT OF THE REPUBLIC OF MALAWI I write to bring to your attention a matter that has been of great concern to me, my Government and indeed the people of Malawi for a long time. This relates to the fact that since your assumption of office as Vice President of the Republic of Malawi, your relations with me and my government have been less than cordial and satisfactory. More especially, I draw your attention to the following developments: First, as you are aware, one of the core functions of the Vice President is to deputise for the President. Furthermore, as Vice President, you have been a member of the Cabinet and as such, you were required to attend all Cabinet meetings so that Government could benefit from your contribution towards national policies and programmes. However, since the first meeting held on July 13, 2004, you have attended only 16 out of the 48 Cabinet meetings held. Furthermore, since May 31, 2005 you have been absent from all Cabinet meetings, first through a series of apologies, and later, without any apology at all. Indeed, several Cabinet meetings have had to be adjourned due to your absence when you were supposed to be deputising for me. You have also not been attending any public functions organised by Government or at which, I as State President was invited as Guest of Honour. Second, I draw your attention to the fact that by the oath of office that you took, it was understood that your primary duty and responsibility as Vice President of the Republic of Malawi was to promote and defend Government policies and programmes and to protect the integrity of Government at all times. But contrary to established norms and etiquette, you have, instead, always publicly criticised and attacked the same Government of which you are part. In so doing, you have violated your oath of office as well as the principle of collective responsibility of Cabinet. Consequently, you have seriously undermined and damaged the integrity of the Government. Third, I have noted with dismay, that whenever I assigned you to represent me at some public functions or meetings, either within or outside the country, you did not deputise for me appropriately, in that you failed to report back to me the decisions of the meetings you attended for the necessary follow up by the Government. In that regard, you have violated and abrogated your duties and obligations to, among other things, support and uphold the Constitution of the Republic of Malawi by carrying out the assignments given to you diligently. Fourth, you will recall that at the time of our inauguration on May 20, 2004, I had decided, and the Malawi nation had given me a nod, to relocate the Presidency from Blantyre to Lilongwe, the Capital City. I had at the same time, given clear instructions that all Government departments and offices should follow suit. This decision was made as one of the prudent fiscal and financial policy measures adopted by our Government to reduce public expenditure and manage our meagre resources. The people of Malawi are failing to understand that whereas every Cabinet Minister obeyed my instructions, you have chosen to do the contrary. You have instead deliberately disobeyed me and moved from your official house in Lilongwe to live at the Mudi House in Blantyre. In so doing, you have shown insurbordination and arrogance that is not compatible with your office as Vice President. Fifth, since you assumed office, the Government and people of Malawi have been puzzled that you have constantly attempted to run a parallel government by organising a number of public events and even political rallies without my authorisation or even the courtesy of informing me. Furthermore, you have also undertaken or attempted to undertake, missions outside the country without my knowledge. In that regard, you have again clearly undermined my authority as the State President and brought discordance within the Government. In the light of the foregoing, I hereby inform you that Cabinet has unanimously decided that you have, on your own volition, not worked in accordance with your mandate as Vice President of our country. Cabinet is therefore obliged to construe that by abandoning your responsibilities, you have accordingly resigned from your position as Vice President of the Republic of Malawi. I have, therefore, with deep regret, accepted your resignation as Vice President of the Republic of Malawi effective today, February 8, 2006. Yours truly, Dr. Bingu wa Mutharika PRESIDENT OF THE REPUBLIC OF MALAWI

Agricultural prospects look promising in 2006

Thursday, 9 February 2006,

By Frank Jomo

Despite agricultural prospects look promising in 2006, the effects of drought that have rocked the Southern Africa’s landlocked country in the past decade will continue to weigh down on the country’s economic growth.

The IMF forecasted a growth rate of 8.2 percent in 2005/06 fiscal year. However economic analysts were pessimistic. But government is optimistic it will meet the target thanks to utmost good fiscal management by the Bingu administration. The currently hunger, which affected about half the population of the country said to be between 10 – 12 million raised inflation. Food accounts for 58.1 percent in Malawi’s Consumer Price Index (CPI). The Standard Bank forecasts that everything being equal, the current level of fiscal discipline is maintained and a good harvest is realized, inflation will ease to 12 percent or less by the end of the year. In December 2005 inflation hovered around 16.5 percent. The IMF reopened its aid taps to Malawi in August last year with a three-year US$55.9 million Poverty Reduction and Growth Facility (PRGF), which it had been denying the country the past two to three years due to economic maladministration, institutionalized corruption and poor governance during the last years of the Bakili Muluzi government. The bank adds that the economic growth would very much depend also on the maintenance of the fiscal discipline the Mutharika administration has professed which has won itself praise from the donor community like the International Monetary Fund (IMF) and the World Bank. Forecasts indicate that agriculture will register substantial growth in 2006 owing to a surplus of the staple food, maize due to good weather and fertilizer subsidy the Bingu wa Mutharika government introduced. “However, the accumulated effect of drought over recent years in impoverishing many farmers may slow the rate of recovery to the last half of 2006,” predicts the bank in its report published on its website. A report released by the Standard Bank of South Africa in Johannesburg says Malawi’s economic growth will continue to be influenced by the behavior of the agricultural sector, which accounts for 40 percent of the country’s Gross Domestic Product (GDP).

Scottish Parliamentarians to Visit Malawi
The Chronicle Newspaper (Lilongwe)

February 7, 2006

A cross party delegation from the Commonwealth Parliamentary Association (Scotland Branch) will visit Malawi from 10 to 20 February 2006. This follows on from a very successful visit last year to Malawi in February 2005 and a subsequent visit to the Scottish Parliament by a large delegation of Malawians lead by the State President Dr. Bingu wa Mutharika last year.

The Scottish Parliamentarians will be led by Dr Sylvia Jackson MSP.

Other members visiting Malawi will include Murdo Fraser MSP (Conservative); Karen Gillon MSP (Labour); Alex Neil MSP (Scottish National Party); Mike Pringle MSP (Liberal Democrat); Mark Ruskell MSP (Green) and Dr Jean Turner MSP (Independent) The main focus for the 2006 visit is to build upon links already established with the National Assembly of Malawi with a view of developing a long lasting relationship between the Scottish Parliament and the National Assembly. The delegation also hopes to meet as many people as possible from all areas of Malawian society therefore the delegation will host two receptions, one in Blantyre and the other in Mzuzu, for politicians and representatives from Scottish and Malawian non-government organisations based in and around these areas.

The delegation hopes to renew old acquaintances, deepen existing relationships and create new friendships during this visit.

Chilumpha catches govt unawares

by Olivia Kumwenda, 06 February 2006 - 05:45:54

Vice President Cassim Chilumpha stunned government on Sunday when he pitched up at the National Anti-Corruption Day commemoration in Blantyre after organisers had assumed that he was not going to attend. Chilumpha, who had been shunning government events, was conspicuously missing from the protocol list on the day’s programme of events, but speakers at the function acknowledged his presence. Under the theme, “Fight Corruption: Develop Malawi” the commemoration graced by President Bingu wa Mutharika was held in the Comesa hall. The President was upon arrival welcomed by Justice Minister Henry Phoya and Anti-Corruption Bureau (ACB) director Gustave Kaliwo, among others. Asked to comment on Chilumpha’s missing from the programme, public events principal secretary a Mr. Juwa referred the reporter to Kaliwo. Kaliwo also refused to comment saying it is an issue to do with public events. But deputy Information Minister John Bande said Chilumpha’s name did not appear anywhere on the programme because he was not expected to attend. “We were caught unawares. We didn’t expect him because he has not been attending government functions for some time so we just went ahead to print the programme without involving him,” said Bande who was silent on whether the VP was invited or not. He, however, said government was pleased with Chilumpha’s attendance as it shows that the VP is part and parcel of the anti-corruption drive adding, “we hope he will continue participating in government business as the VP of the country.” Chilumpha’s press officer Horace Nyaka said his office does not want to talk about anything to do with the modalities of the event. And in his address, Mutharika said he was sad to note that corruption is still rampant is Malawi but added it will not weaken him in his fight against evil. “You will recall that attempts have been made to impeach me because of my strong stand against corruption. I have been told that the move to impeach me will stop if I stop prosecuting those that are corrupt. But having been threatened with impeachment, my determination in the fight against corruption is even stronger,” said Mutharika. The President also said it is not fair for the opposition to say that government and the ACB have produced nothing in the anti-corruption drive for the past year. “You may wish to know that one high profile politician and former cabinet minister, has been found guilty of corruption. Others will follow shortly,” warned Mutharika. Kaliwo also admitted that there is still more to be done in the fight against corruption and that at the moment the bureau has cases in excess of 1000. “We are setting up mechanisms to reduce the cases by 80 percent by the end of this year. Some cases might be closed because we can’t trace witnesses,” said Kaliwo. In his remarks, Phoya said his ministry will continue supporting the ACB in the anti-corruption drive as the fight requires collective effort.

Malawi president says will not back down on graft
Sun Feb 5, 2006 4:52 PM GMT

By Frank Phiri
BLANTYRE (Reuters) - Malawi President Bingu wa Mutharika, whose war on graft has won the hearts of Western donors, vowed on Sunday not to relent in his drive against corrupt officials despite political pressure.
Wa Mutharika's corruption campaign won its first major victory on Friday following the conviction of former education minister Yusuf Mwawa for stealing $1,360 last March.
Speaking on Malawi's "Anti-Corruption Day", wa Mutharika attacked the opposition Malawi Congress Party and United Democratic Front for conspiring to impeach him because of his zero-tolerance on corruption.
"Attempts have been made to impeach me because of my fight against corruption. My determination is even stronger. At least one former cabinet minister has been indicted and found guilty. Others will follow shortly," he said in a speech in Blantyre.
Wa Mutharika accused the government of his predecessor Bakili Muluzi of condoning corruption, which he said led to economic stagnation and the withdrawal of aid by various donors.
"Fighting against corruption remains the locus of my government's development policy. I will not relent on my zero-tolerance stance against corruption, and I will not rest until this scourge is eliminated," he said.
Opposition legislators last month dropped an effort to impeach wa Mutharika on allegations of corruption and abuse of office, saying they did not have public backing.
The impeachment motion had been criticised by Britain and other key donors to Malawi, which depends on foreign aid for almost half its national budget and where 5 million people are in need of food aid.
Wa Mutharika said his administration had recovered several million dollars that the former regime had planned to steal and used it for building two major roads in the central region.
"We have been able to protect funds which some officials wanted to steal. If funds like these were available during the last 10 years, where did they go?" he said.
Donors including the International Monetary Fund have praised Malawi's anti-corruption efforts and released aid which had been frozen during Muluzi's administration.
Mwawa, who was education minister in Muluzi's government, was found guilty of stealing $1,360 in public funds to pay for his wedding party at an upmarket hotel. He is due for sentencing on February 9 and could face up to life in prison.
Anti-corruption bureau officials have accused Muluzi of diverting more than $4 million in donor funds into his personal accounts. The former president describes the accusations as politically-motivated and has not yet been formally charged in court.
Three other former members of his cabinet are also being probed for various alleged corrupt practices.

Malawi yet to rip from MCA
by Arthur Chipenda, Malawi News Agency, 03 February 2006 - 06:59:49

Malawi is yet to start implementing the K2.7 billion (US$20.9 million) American government sponsored project to fight corruption and improve fiscal management. The American government, through the Millennium Challenge Corporation (MCC), approved Malawi’s two-year threshold country plan on September 23, 2005.The deal would help Malawi to demonstrate its commitment to reform before qualifying for a full Millennium Challenge Account (MCA). The MCC designed a Threshold Country Programme to assist countries that had not yet met the requirements for the MCA eligibility but were committed to undertake measures to reform their political, economic and social policies that promote economic growth. The Economic Planning and Development Ministry, which is Malawi government’s coordinating department of the initiative, has projected that the country might begin implementing activities under the programme in the coming three to six months. “Implementation of the programme will depend on how fast the American government sets out the mechanism for executing the programme,” the Ministry’s monitoring and Evaluation Director, Ben Botolo, told Mana. Botolo said the American government was presently in the process of identifying an organisation that should be implementing the programme on its behalf, adding that the process might take some time before the implementing firm got set for the programme to start.Public Affairs Officer for the American Embassy in Malawi, Mitchell Moss, however, said recently that programme activities for the country’s Millennium Challenge Threshold Plan would commence in the next 90 days. “Implementation process has already started and Usaid (United States Agency for International Development) is in the final stages of the procurement process for Malawi’s programme,” Moss said.The Malawi government has proposed a total of 14 specific activities that it would undertake in the coming two years of implementing the threshold plan. The government has committed itself to procure and fully deploy an Integrated Financial Management Information System, improve fiscal management by passing and implementing Anti-Money Laundering legislation, and also develop and pass a Declaration of Assets Law to ensure transparency among public officials.As part of implementing the programme, the government will also facilitate creation of a media council to promote press freedom as well as train journalists to report and analyse issues related to corruption, economic governance and financial management, among other things. Building the country’s prosecutorial abilities in the Department of Public Prosecutions, the Anti-Corruption Bureau and the Malawi Police Service are other major government commitments for the coming two years. Malawi was among 70 countries that the MCC identified as candidates for the MCA in 2005 after it selected 16 other countries for the programme in 2004. The American government set up the MCC to provide poor countries with financial assistance to reinforce good governance, economic freedom and investments in people who promote economic growth and eliminate extreme poverty.

ACB wants Muluzi for abuse of office
by Gedion Munthali, 04 February 2006 - 04:47:12

The Anti-Corruption Bureau (ACB) wants former President Bakili Muluzi, currently recuperating in the United Kingdom, for abuse of office for pardoning Sabir Suleman who was serving a five-year jail term for attempting to bribe a High Court Judge, Maxon Mkandawire, with K1 million (about $8,000), a highly placed source has confided in the Weekend Nation.The source said in an interview on Thursday investigations were already concluded and a report was already written which includes letters which Muluzi wrote to facilitate the release of Suleman who is reportedly in Dubai.“I think what is remaining is for the ACB to arrest Muluzi and charge him with abuse of office,” said the source, and added: “This would have already happened if Muluzi did not leave the country for medical attention in the United Kingdom.”ACB Director Gustave Kaliwo could not be reached for comment on Friday.Director of Public Prosecutions Ishmail Wadi said he was not aware of the issue, but thought the ACB could provide some information.“I do not have information on that issue, but the ACB could have some details on it,” said Wadi.Deputy Commissioner of Prisons McDonald Chaona confirmed that Muluzi pardoned Suleman on May 13, 2004, 11 days before the former President left office.“Suleman’s brother wrote a letter to Muluzi on May 13, 2004 informing him that Suleman had been sick ever since he went to prison. The former President then directed that Suleman should be released and taken out of the country for treatment,” said Chaona.He said Muluzi signed the pardon order between May 16 and 17 May, 2004. This was just a day before the general elections which were scheduled to take place on May 18 but were later pushed to May 20.Kaliwo, who prosecuted Suleman while in private practice, said immediately after the pardon that the development confused him.“If we are serious about corruption, all state machinery should work together to make sure that corruption is not tolerated. I am confused with this development,” said Kaliwo.At the time he was freed, the ACB were investigating him for allegedly feigning illness so that he continues to stay in hospital rather than in prison.

Bank sues Bakili, Shanil for K93m
BY Frank Namangale03:24:08 - 03 February 2006

Closed down Finance Bank Malawi has sued former president Bakili Muluzi, wife Shanil and his brother Friday for failing to pay a K50 million debt that has accumulated interest and now stands at K93,597,522.82.The High Court in Blantyre on Tuesday separately granted an injunction sought by Finance Bank’s lawyers against Atupele Properties Limited and Knight Frank Malawi Limited, agents for Atupele Properties, restraining the agents from paying out the proceeds from the sale of Keza Office Park to other persons except secured creditors.But Muluzi’s lawyers Sacranie and Gow said Thursday they were not yet served with both the summons and the injunction, but said they were going to defend any litigation vigorously and vehemently, leaving no stone unturned.In the first case, court documents revealed that by various instruments in writing, the defendants guaranteed a loan granted to Atupele Properties in the sum of K50 million each, promising that they would pay singularly the debt of Atupele Properties in the sum of K50 million if the company failed to pay the debt.“Atupele Properties Limited has now failed to pay the debt and the sum has now risen to K93,597,522.82 and continues to attract interest at the Finance Bank rate until payment.“The plaintiff [Finance Bank] claims from the defendants in pursuance of the said payment of up to the sum herein claimed from anyone of them singularly until the debt is paid in full,” reads the writ of summons in part.The bank also claimed legal fees reimbursement the bank would have to pay to its lawyers Chagwamnjira & Company, calculated at 15 percent of the sum claimed plus surtax.The court commanded Muluzi, his wife and brother to either satisfy the claim or return to the court the accompanying acknowledgement of service within 14 days from the date of service, stating whether they intended to contest the proceedings or not.“If you fail to satisfy the claim or return acknowledgement within the stated time, or if you return the acknowledgement without stating therein an intention to contest the proceedings, the plaintiff may proceed with the action and judgement may be entered against you forthwith without further notice,” reads the summons, witnessed by Chief Justice Leonard Unyolo. In the other case where the court stopped Knight Frank Malawi Limited from paying out proceeds of Keza Office Park to unsecured creditors, they said either party was at liberty to apply to the court to vary, vacate or otherwise amend the order, and such application to be made within 21 days from January 30, 2006 when the order was made.“Take note that if you the defendants disobey this order, you will be guilty of the contempt and may be sent to prison or fined or your assets may be seized,” reads the order sent to Knight Frank and Muluzi himself, currently in England receiving medical attention.Muluzi, chairman of United Democratic Front and former president, is chairman and director of Atupele Properties Limited and his brother Friday is a director for Atupele Properties.Sworn affidavits for Finance Bank by their lawyers Chagwamnjira & Company state that the K50 million loan was granted against the security of Limbe East [plots] 33, 34 and 35 valued at K2 million, K13 million and K35 million respectively.The affidavits read that Muluzi failed to clear the debt and when the debt was called upon, the second defendant were Muluzi’s agents, (they) promised to clear the Finance Bank debt from proceeds of sale of some properties.But in a letter dated January 26, 2005 from Knight Frank on behalf of Atupele Properties to Finance Bank, which Chagwamnjira & Company lawyers submitted as an exhibit to the court, the agents say in order to redeem the K50 million loan, [among others] a decision was taken to sell off either in whole or part thereof the entire Atupele Properties, Churchill Road complex.“Our selling campaign commenced by marketing LE 212A as a separate entity by inviting cash offers in excess of K110 million.“Regrettably, either due to Christmas shut down period or the current adverse economic trading conditions, no definitive offers to purchase either of the two properties was received from willing and able to financially perform potential buyers,” reads the letter in part.It says offers to purchase over a term period were unilaterally rejected due to the fact that the funds were required for loan redemption. The agents said they have proceeded in January to market the entire complex as one unit, being a consolidation of all the Churchill Road properties, by inviting a reduced cash offer from K160 million to K135 million.But apparently the Finance Bank was not convinced with this letter and went ahead to sue Muluzi, wife and his brother Friday, a situation likely to depress the former president already facing other litigation, the major one being where he is being probed by Anti Corruption Bureau (ACB) for allegedly banking K1.4 billion donor money into his personal accounts.

Malawi government changes former leader’s passport
Monday, 30 January 2006,
By Frank Jomo

Blantyre, January 30 (AND)-The Malawi government has changed the status of
passports for Malawi former leader Bakili Muluzi and his wife Shanil who
until now were still traveling as president and first lady.

The government has changed their occupations to businessman and business lady. The Immigration department says the two were supposed to surrender their passports immediately after handing over the presidential robe to President Bingu wa Mutharika but never did that.
“Muluzi and his wife never surrendered their passports for changes in their occupations. So, we called for the passports before they left for United Kingdom (where Muluzi has gone for medical treatment). At first Muluzi was not cooperative but we warned him to comply or face embarrassment at the airport,” an official from the department told Malawi News.
“We have one President and one First Lady in the country. That is Dr. Bingu wa Mutharika and Madam Ethel Mutharika. It is wrong for Muluzi and his wife to continue traveling as president and first lady,” said the source.
There has been bad blood flowing between former president Muluzi and his successor Mutharika. Muluzi has been accusing Muthatrika of victimizing him and whatever the current president does to Muluzi is viewed with an eagle’s eye.
However Malawi’s Immigration Public relations officer Bryson Bendala says there is nothing sinister in his department asking for the passport from Muluzi saying he together with his wife were required to honorably surrender their passport after leaving office.
“When a person has no chances of using a passport, he is supposed to surrender it to us. We expected Muluzi and his wife to honorably surrender their passports, which they never did and continued enjoying presidential privileges,” said Bendala.
The privileges of using diplomatic passport with presidential occupation include red carpet treatment, no payment of customs duties and no payment for visas in countries which requires visas.
- Story by African News Dimension