Tractorgate scandal another case where Malawi govt moves to shield culprits

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The Malawi government has obtained a stay order from the country’s High Court effectively stopping the implementation of key recommendations of the Ombudsman report that among others called for the crack down on state procurement chiefs implicated in the country’s multibillion-kwacha “Tractorgate” scandal.

Under civil case number 152 of 2016, the Attorney General Kalekeni Kaphale is also challenging the report’s key recommendations on behalf of the principal secretaries for Finance ministry, Agriculture Ministry and the National Assembly.

Kaphale, this week was tongued tied and referred this reporter to the court files for answers.

“Access those files and appreciate the contents,” Kaphale said.

This development means the politically connected officials are likely to escape scot-free.

Kaphale also chided Malawi’s ombudsman, Martha Chimuza-Mwagonde, saying her call for officials to publicly apologise to the people of Malawi was unreasonable claiming there was no independent assessment to verify claims by the Ombudsman’s report that government procured archaic tractors from India.

He also queried the Ombudsman for abdicating her duties, saying her dictating on how the National Assembly conducts its business in its handling of loan authorization bills was faulty.

In an interview this week, Chimuza-Mwagonde described government’s move as unprecedented saying her office will defend the report.
“I believe we acted within the law. This was the first systematic investigative report we have conducted as an office,” Mwangonde.

Last month Chimuza-Mwagonde, formally asked the prosecution authorities to arrest the state procurement chiefs.

In a 48-page report on the scandal, released in November this year, Chimuza-Mwagonde revealed that minutes of the relevant meeting of the government’s Internal Procurement Committee (IPC) have mysteriously disappeared.

In addition, it is understood that the government stonewalled her request for the names of those who attended the meeting. The only known participant is the IPC chairperson, Rashid Khama Mtelela, from the Office of the President and the Cabinet.

The IPC’s members are known to have been senior civil servants drawn mainly from the president’s office and the agriculture ministry.

Many of the Tractorgate beneficiaries are also powerful individuals. The Ombud’s report implicates 68 alleged beneficiaries, including the foreign affairs minister and ruling Democratic Progressive Party (DPP) spin doctor Frances Kasaila; the family of former president Bingu wa Mutharika; the Speaker of Parliament, Richard Msowoya; and President Peter Mutharika’s chief of staff, Peter Mukhito.

Also, alleged to have benefited is Mulli Brothers, a controversial Malawian company with mutually beneficial ties to the DPP.

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The scandal revolves around the IPC’s decision in 2014 to sell off 177 tractors and 144 maize shellers intended as drought relief for small farmers to civil servants for a song.

The tractors, purchased for R740 000 each, were sold for R100 000 each, raising a paltry R12-million.

The scam was allegedly disguised as a routine public auction of government equipment.

Ombud’s report – submitted, ironically, to the implicated parliamentary Speaker Msowoya two months ago – finds that the sale was “illegal and irregular”.

Titled “The Present, The Future Overburdened”, the report cites nine instances of gross maladministration by government officials.

These include the fact that the members of the IPC were conflicted. No details are provided, but the clear implication is that they were beneficiaries of the sell-off.
Other government failures listed in the report are:
• the manner in which the Loan Authorisation Bill needed to raise money for the tractor purchase was rushed through parliament. Former finance minister Ken Kandodo, told Parliament in 2010 that the loan would be repaid over 20 years;
• the fact that civil servants took verbal orders from the Presidency;
• archaic financial record-keeping at the ministry of finance; and
• the procurement of “obsolete and archaic equipment, described as “maladministration of the highest order”.

The government’s chief mechanical engineer. Hendrix Kazembe, is quoted as saying that the Sonalika Tractors were built using outdated technology from the 1970s.

The Ombud concludes: “The officials who were members of IPC presided over the sale of the farm machinery and benefited from the sale should be prosecuted in accordance with the Procurement Act.

The government has never explained why the equipment was put out to tender instead of being distributed to the small farmers who were supposed to benefit.

The tractors and shellers were part of a $50-million (R695-million) development scheme known as the Green Belt Initiative, which was set up to buffer millions of peasant farmers from drought.

Funded by a loan from the Export-Import Bank of India (Exim Bank), the scheme sought to put about a million hectares of farmland under irrigation and improve food security for peasant farmers, who make up 70% of Malawi’s population.

The Ombud reveals that the finance ministry used an Indian-based company, Apollo International, to perform the contracts under the three line of credits from Exim Bank.

The first loan agreement between the government and the bank, dated May 14 2008, was for $30-million The money was to be used to finance supply of irrigation, storage, a tobacco threshing plant and One Village One Product, a scheme designed to encourage crop specialisation.

A later $50-million loan was intended to finance cotton processing facilities, as well as the Green Belt Initiative and One Village One Product.

A third loan, signed on December 13 2012 was for $76,5-million and aimed to finance the development of an irrigation network, the establishment of a sugar refinery in the central district of Salima under the Green Belt initiative and development of fuel storage facilities.

Earlier this year Chimuza-Mwagonde said that she had received death threats in connection with her investigation into large-scale graft in the the Green Belt Initiative

An anchor with CNBC TV18 for almost 4 years. Also co-anchors prime-time market shows like Power Breakfast, Traders only, Markets Mid-day and NSE Closing Bell.