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Suspicious funding

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Government has allocated projects whose total value is K3.4 billion to 86 MPs who mostly voted against the electoral reforms bills in December, Malawi News can reveal.

However, the funding has left 107MPs in the cold.

According to the budget Malawi News has seen, 86 constituencies that have been funded are expected to get approximately K40 million each.

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From the list of beneficiaries of the funding, a majority are from the Southern and Eastern Regions with just a few from Northern Region from the ruling DPP, PP and UDF.

Only one Malawi Congress Party (MCP) member, Amon Nkhata of Kasungu Central, who was outside the country on duty during the vote, is among the members to benefit from the special funds.

But According to Malawi News investigations, in the revised budget, Treasury has not allocated extra money towards the Constituency Development Fund (CDF).

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In the 2017/18 budget, government allocated K35 million each to the 193 constituencies. However, the origins of the K40 million each allocation to the 86 constituencies has not been revealed. The difference between the CDF and the suspicious funding is that CDF is outlined and is determined by the community while the parallel funding is said to have beendetermined by the selected legislators themselves.

A Member of Parliament who is on the list, but spoke on condition of anonymity, has confirmed to Malawi News that the funding is expected to start after mid-year budget review.

He said it was in the agreement made during their audience with President Peter Mutharika before the electoral reform bills were tabled.

Member of Parliament for Kasungu North East, Elias Wakuda Kamanga, who is on the list, confirmed with Malawi News that officials from government called him three weeks ago for negotiations.

“At first I asked for a market at Ndonda. In fact, I have been asking for this market since I became Member of Parliament,” he said.

According to Kamanga, who voted yes to reforms, government officials said the money they have was not enough to cater for construction of the market as the estimated cost for the market was K400 million which is higher than the share he is to get.

“So we agreed for the projects based on what you have seen,” he said.

According to the document with details on the matter, some of the projects to be carried out in Kamanga’s constituency are two guardian shelters and two police houses.

In a separate interview, the only MCP member to benefit, Nkhata, said he was aware of the development.

Nkhata said he although he cannot refuse development, he is surprised that he is the only member of MCP on the list.

“While these projects are worthy of my constituency based on several appeals in Parliament, the selection criteria smacks a lot of suspicion at a time when we are supposed to be rational. We have other equally deserving MPs that deserve developments other than that dominantly only DPP MPs.

Projects are asked in Parliament through notices to ministers, and it is obvious that most MPs from various constituencies did that but this is not the case. I cannot refuse development on behalf of my people but I am just surprised with the way it is coming,” Nkhata said in an interview Friday.

Minister of Finance Goodall Gondwe, who confirmed the funding, said Friday in an interview Treasury has increased funding to Ministry of Local Government and Rural Development for some activities.

“If you can recall, in my midyear budget statement I said one government priority was for the development of rural areas. So, this funding is meant to complete some projects in some rural areas and Ministry of Local Government is expected to administer the projects,” Gondwe said.

When he was quizzed as to why the funding has left some members of Parliament, Gondwe said he is likely to consider the other Members of Parliament in the next budget.

Soon after meeting President Peter Mutharika before the electoral reforms bills were tabled in Parliament in December last year, some People Party (PP) MPs revealed to the party’s National Executive Committee (Nec) that he had promised them a K40 million project each, if they voted against the bills.

Budget and Finance Committee Chairperson Rhino Chiphiko says it is likely that government will draw funds from the Consolidated Fund Account for these projects.

“This is illegal because these projects are not budgeted for and are not approved by Parliament. It is very unfortunate that this is happening at a time government, through MRA, is struggling to collect revenue to fund the budget,” Chiphiko said.

He said this means that there will be an increase in expenditure and the projects can only be funded by an increase in borrowing.

In his response to the mid-year budget review this week, Chiphiko pointed out in Parliament that the country’s public debt has exceeded the recommended debt to GDP ratio of 20 per cent.

He said the current Debt/GDP ratio of 25 percent leaves no fiscal space for government to borrow more.

“The current budget is vulnerable to unapproved expenditures because the pressures emanating from unauthorized expenditures for elections next year and the K40 million projects to selected Members of Parliament is one of them,” Chiphiko said.

He said it is more worrisome that these types of expenditures will increase government deficit, which will result in an increase in inflation and reverse all the gains of the macroeconomic stability.

He said the funding will increase Interests rates and the exchange rate will also face pressure.

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