The Chief Resident Magistrate Court in Lilongwe has today, Monday 23rd October 2023, committed the case involving fraud and falsifying documents in which the then agents of the Malawi Government misrepresented financial information to the International Monetary Fund (IMF). The suspects who are answering the charges related to the criminal offence include the former Finance Minister, Joseph Mwanamvekha, former Reserve Bank of Malawi (RBM) Governor, Dr. Dalitso Kabambe, and former RBM Deputy Governor, Henry Mathanga.
The alleged falsification took place between 2017 and 2020 and the suspects were arrested in December, 2021 following the ousting of the DPP from Government in 2020. The designated trial Magistrate Court has referred the matter to the High Court which has “unlimited original jurisdiction to hear and determine any civil or criminal proceedings under any law”.
In its comprehensive story published on 2nd July 2021, Shire Times designated the former RBM Governor as “the cartel chef who cooked from reserve bank”.
Kabambe’s stay at RBM as its Governor offered us a rare but vital window to understand his character as one inclined to fraud and dishonesty according to audit report released in 2021 by Delloite, an international audit firm.
You see; while Kabambe was given an opportunity to serve the country at the highest level of financial and economic management of this country, it appears that he was working even harder to illegally stabilize his very own pockets and those of his political masters through abusing and looting public funds at the RBM. While this had long been suspected by many, the Delloite report simply and finally confirmed the nefarious and clandestine activities that were thriving under his command.
The Delloite report is not for the faint hearted! It is the kind of a chronicle that makes one lose faith in humanity in general. Among others, between January 1, 2019 and June 30, 2020, the following illicit and dubious transactions were made at the Reserve Bank of Malawi through the hands and command of Kabambe:
K2.2 billion went out for “building maintenance, rentals, school fees allowances, recall of diplomats” but there are no supporting documents for these transactions. In short, this amount was stolen and Kabambe made a barefooted claim of these expenses.
K4.1 billion paid to the Pensions and Gratuity Account without an approved funding instruction from government. FDH Bank is connected to this.
K6.5 billion went to FDH Bank in December 2018 and December 2020, which auditors found suspicious.
K3.9 billion costs payable to FDH Bank that were not disclosed to the board for approval.
USD$769 million was disproportionally channelled through FDH Bank.
K27 billion was paid to top managers who were retiring, who in turn provided K7 billion to the then governing Democratic Progressive Party (DPP) in whose interest Kabambe has, at the material times, always worked.
K2.8 billion paid to various law firms, but auditors did not trace any supporting documents.
Mulli Brothers Limited (MBL) was irregularly issued with letters of credit to supply fertilizer to the Government.
One company, Mitra, was awarded two contracts of K1 billion and K757 million contrary to RBM policy. Mitra was also irregularly paid 60% upfront.
K9.7 billion was siphoned in January 2020 through dubious purchase of overpriced materials for the Prisons Department worth US$18 million from the United Arab Emirates (UAE).
As you can see, under the watch of Kabambe, RBM was reduced to nothing more than a “village bank” for the ruling DPP and its conduit entities like FDH Bank, legal firms and other business entities like Mulli Brothers.
And it is worth pointing out that all this was done in clear violation of the Reserve Bank of Malawi Act, therefore constituting criminal offences for which Kabambe and his fellow players in the syndicate stand to be prosecuted.
To say that what happened at RBM is immoral is a great understatement, it is a crime against the nation of Malawi. And to have the man who orchestrated, coordinated and benefited from this vulgar plunder say that he would one day like to lead this nation is not only an insult to our collective intelligence and but also to our sensibilities of integrity. In effect, he is requesting the country to give him permission to even steal our private parts in future. Anyway, that was a bit of digression since our discussion is about his recent court appearance together with his accomplices.
This affair, which, encapsulates the tragedy of our time created a sinkhole in our economic landscape such that Malawi became so broke (do you remember what Mutharika once said? He literally said Malawi is broke). In order to continue receiving funds (for further stealing) from bilateral and multilateral institutions such as the IMF and World Bank, misreporting became their chosen weapon of use.
In his words, the Director of the IMF’s African department, Abebe Aemro Selassie, once commented (about the Malawi’s discovered misreporting saga) that “the IMF takes misreporting cases seriously and, in this regard, I appreciate the authorities’ efforts in delivering on the corrective efforts.” The consequence of this is that Malawi stood doomed from receiving financial assistance (be it through loans or aid) from such critical institutions and this points to a calamitous disaster of epic proportions for the country that badly needs financial aid to tick. It would not be surprising to hear others thinking that what Kabambe and his conspirators did was an act of ‘treason’ to the nation.
Here we have a well-educated man who had the rare opportunity to do right but chose, instead, to use his gifts to inflict pain and misery on the people. Perhaps ‘tragic’ doesn’t even begin to describe it. All the same, it appears that mother nature is on the verge of correcting this injustice.
Meanwhile, Kabambe is walking with formal charges in connection with these dubious and criminal transactions. But while the prosecution is good, the recovery of the money misappropriated is even more important and focus shouldn’t be lost on that. The need to recover money lost under these transactions as well personal gains realised by those involved in the scheme cannot be overstated.
Now, when you consider all these factors in their totality, that is to say his role in siphoning government funds to sustain the then ruling clique, you get to understand why Kabambe had a larger-than-life character at RBM. Remember the K30,243,023.16 monthly salary that once raised eyebrows of reasonable people? How was that even approved without anyone raising an issue? I mean did we really have the Financial Intelligence Agency properly so-called in this country and doing its job at that time?