Goodall Gondwe pulls plug on loans audit query


Minister of Finance and Economic Planning and Development Goodall Gondwe has put it point blank that he will not waste government’s money to start the process of auditing all loans and grants government has obtained since 1994.

This is contrary to what Gondwe told the House last week that he would make available the information regarding the loans and grants as requested by Malawi Congress Party Member of Parliament for Dedza East Juliana Lunguzi.

Lunguzi asked government to make available within 90 days details of each loan or grant that Parliament approved since 1994 for review by the Budget Committee.


She said the review would determine the extent to which the loans or grants were used for the intended and authorised purposes and the success rate of the loans and grants.

But even before the motion was moved, Gondwe already committed himself to provide the details.

He said: “I am working on it. I have been given 90 days and I will definitely bring it.”


But on the day Lunguzi moved the motion, things started happening to the contrary.

From the government side there circulated a paper to its MPs advising them not to support the motion.

The paper reads: “Please inform members to reject the motion on why 1994 and why not start in 1964.”

Malawi attained multiparty government in 1994. Between 1994 and 2004, United Democratic Front was in power and was succeeded by the Democratic Progressive Party between 2005 and 2012. The People’s Party took the reigns between 2012 and 2014 before DPP returned.

Malawi Congress Party ruled government from 1964 to 1994.

And in a fresh interview on Thursday this week at Parliament on whether government will make available the loans and grants details as requested, Gondwe said:

“The issue is not worth commenting [on]. We are going to lose more revenue if we do that. Already we have lost budgetary support.”

But Lunguzi has vowed to take on Gondwe after the given 90 days elapse.

“It is 90 days. I am counting. If he says so, we will see. It is a Parliamentary order,” said Lunguzi Friday.

In her motion as moved on Thursday last week, Lunguzi said borrowing is not bad, but what is bad is “when you borrow and come back to borrow again, two or five years later, to use it for the same purpose, when you have hardly anything to show for.”

“Mr Speaker, Sir, this House has not received any report on how the loans that the government has borrowed since 1994 were raised. How they have been used, if they were successful? As it stands, government departments have huge internal debts, such that internal service providers are becoming reluctant to provide further services to some of them,” she said.

Quoting http://www.rbm. mw, Lunguzi said the external debts that Parliament has approved have increased from K400 billion in 2012 to over K1 trillion in 2015, an increase of 160 per cent.

She said: “In addition, Malawi has a total debt service, that is principal plus interest that we are paying to external creditors which has increased by 208 per cent, from K7 billion in 2012 to K22 billion in 2015. Interest payments alone have increased by 100 per cent from K7 billion in 2012 to K8 billion in 2015.”

“If we have to go by what the papers carried on the 30th November, 2016, this country has a debt of over K2.1 trillion. Mr Speaker, Sir, these figures do not include the domestic debt which according to the August Economic Monthly Review, the government net domestic borrowing was at US$800 million which is about K562 billion, that is in absolute terms,” said Lunguzi.

She asked government to explain where funds for irrigation project at Nkopola went as there is nothing at the site.

She also cited the famous Jali- Chitakale-Phalombe-Road which she said is failing to finish despite getting loans for the project. She further cited Phalombe District Hospital project which after 10 years of borrowing for the project, there is nothing on site.

“Every year during budget meeting, we have never heard from the Minister to say where we are with this borrowed money. We are mortgaging this country. We keep on borrowing yet we can hardly see the money. We have had IFAD project from 1999 to 2001 and ADB horticulture project where we were told we will be exporting horticulture products to Dubai. Where are the horticulture products that we are exporting?”

She further faulted government for buying wrong equipment for Youth Enterprise and Development Fund project and dye machines which could not be used.

She further argued: “Mr Speaker, Sir, the information was to the effect that just a day ago we passed Bill No.31 on a fibre network and somebody was saying that Malawi Telecommunication Limited (MTL) floated a tender to do private partnership so that they should come up and do fibre optical so that we have speedy internet.

“These were the very same reasons which we were given by government to approve Bill No. 31 of 2016: Export and Import Bank of China (National Fibre Backbone Project) Loan (Authorisation). MTL, a private sector wanted to do the same. It was in the Nation newspaper of 2015 and it was a project to be implemented by Cyber Net Malawi under a World Bank Funded Regional Communication Infrastructure Projects (RCIP). We borrowed for a similar project. So, one wonders: Do we ever check ourselves?”

Lunguzi wound up: “Through you Mr Speaker, Sir, the Minister told us that he will give us a document but all he did the last two days was to walk around with the document that he was supposed to give us.

“And again Standing Order 86 says that a Committee report, once adopted, a responsible government official is supposed to give us a response in 90 days. It is my expectation that after this motion we are going to get a report on what is happening. So through you, Mr Speaker, Sir, I am moving this motion because I am worried, as a Malawian, to the extent on how we are borrowing and the duplication of the borrowing that we are doing as a country.”

The motion was curtailed even before any contribution because Gondwe had earlier said he would provide the details.

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