THE K4 BILLION SAGA: Where cash came from


The Ministry of Local Government had to reduce its budget to raise K4.2 billion to pay lawmakers by cutting expenditure in district hospitals, construction of boreholes and rehabilitation of roads in cities.

Malawi News has seen budget allocations and documents that reveal how the K4 billion was raised, with the Ministry of Local Government ignoring the crisis in hospitals, and the water problems in most rural communities.

This explains why it has been difficult for Finance Minister Goodall Gondwe to articulate and explain where the money came from.


He first declined to mention the source of the K4 billion, then said it was from a surplus and finally changed the narrative saying that the money was expected to come from Malawi Revenue Authority collections or grants.

All the district hospitals in the country had their allocations slashed by 5 percent to raise the funds for MPs.

For example, Mwanza District Hospital had an approved budget of K148 million but the 5 percent reduction resulted into a K7 million cut from the budget.


This is a hospital, according to acting District Nursing Officer, Emma Kapawe, which does not have nebulizers, a scanning machine, wheel chairs, a heater in the nutrition rehabilitation unit, sanctioning machine, patient trolleys and sterilising machines.

Kapawe said in times when patients require diagnosis they are referred to Lisungwi Community Hospital in Neno District or Queen Elizabeth Central Hospital in Blantyre as the hospital’s scanning machine stopped working a year ago. They also don’t have an ambulance.

Her observations confirm the problems most district hospitals are facing in the country which has always led to deaths in most vulnerable communities.

This week we learnt about the rabies outbreak in Mangochi district where the hospital had an initial allocation of K418 million but was reduced by 5 percent and lost K20 million.

Sadly, the district does not have the vaccine, a development described as scary by Village Headman Ng’omba whose areas – Nkukuta, Nalungu,Mtekete – have been hit by the outbreak.

He said 18 of his subjects have been bitten by rabid dogs and don’t have treatment.

Last week Central Medical Stories revealed that hospitals are failing to pay K6 billion because of financial problems.

A 400 paged Excel budget document seen by us, show that about K350 million was deducted from the total budget for all district hospitals in the country.

The Development of Boreholes lost over K750 million in the deductions while the budget for the rehabilitation of roads in Lilongwe, Blantyre and Mzuzu saw K3 billion removed from the total allocation of K10 billion approved by Parliament.

This week the Secretary to Treasury, Ben Botolo, said Treasury had nothing to do with Ministry of Local Government’s revisions when asked whether as Treasury they played a part.

Botolo said Treasury does not have any powers over government money beyond allocation to various ministries.

“The ministries are policy holders and they decide what to do with their money. All the Treasury does is to implement. When we allocate the money to Ministry of Health for example, the Treasury cannot go to the ministry and dictate what drugs it should procure. The issue [of 4 billion Kwacha] was discussed in Parliament, why not ask the MPs those questions,” he said.

Minister for Local Government Kondwani Nankhumwa was not answering the phone when Malawi News tried to get a comment from him.

Principal Secretary in the Ministry of Local Government, Kiswell Dakamau, referred us to the ministry’s spokesperson Muhlabase Mughogho saying she was better placed to comment on the matter.

In an emailed response, Mughogho, said constituents

have been demanding several developmental projects from their Members of Parliament.

The Ministry of Local Government, she said, has been getting these requests from Members of Parliament through parliamentary deliberations.

“Unfortunately, councils do not currently have funds to meet such demands. After noting this, the Ministry expressed the need to the Ministry of Finance of extra funding for various development projects in the country,” Mughogho explained.

But she was quick to say that Local Government is just an implementer and not responsible for finding the money for the projects approved in the national budget.

“Funds meant for the implementation of constituency projects are meant to be sourced by the responsible Ministry which is the Ministry of Finance Economic Planning and Development,” she said when asked why the ministry took off money from critical areas of hospitals, water and roads and channel it to MPs when there is already Constituency Development Fund (CDF) and Local Development Fund (LDF).

“You may wish to know that this Ministry is not responsible for allocation of funds in hospitals, roads, water nor any other projects. Resource allocation is done by Ministry of Finance and Members of Parliament approve during budget deliberations in Parliament.”

The answer from the Ministry of Local Government squarely put the blame on Ministry of Finance reflecting the ongoing silent wrangle between the two ministries.

Malawi News uncovered the government’s plot to share K4billion among 86 MPs most of whom helped the government to reject the electoral reforms bills.

Opposition Members of Parliament pressured the government until it settled to distribute the money to all the 193 MPs in the house, a development described by many observers as wrong.

Human rights groups such as HRCC and Cedep have since called for both Gondwe and Nankhumwa to resign from their positions for championing the illegal funding and they have also called for mass demonstrations on April 27 for the same.

Last week, Anti-Corruption Bureau said that they have opened a file following several complaints it has been receiving concerning the K4 billion payout.

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