Malawi audit confirms extensive mismanagement of COVID-19 funds

Last week, Malawian President Lazarus Chakwera surprised the nation by firing Minister of Labour Ken Kandodo after an investigative audit of COVID-19 fund spending found that the minister improperly used nearly 614,000 Malawian kwacha ($780) as an allowance for a foreign trip.

The audit — a part of the commitments made by Malawi when seeking financing from the International Monetary Fund — looked into how 6.2 billion kwacha disbursed by the government in 2020 was used. Last spring, the government received $91 million from IMF under the Rapid Credit Facility to help to address the coronavirus pandemic.

Carried out amid public outcry over allegations of misuse of COVID-19 funds, which health experts said was crippling the country’s pandemic response, the audit revealed unprocedural procurement, irregular allowances, improper accounting, and wasteful expenditure without any appropriate budgets.

Though development partners in the country say they are hopeful that the audit — which names Malawian officials involved — and the government's commitment to tackling corruption will lead to greater accountability, local civil society members say it is too little, too late.

Sylvester Namiwa, executive director at the Centre for Democracy and Economic Development Initiatives, said that the abuse of COVID-19 funds resulted in the deaths of Malawians and that the government should have closed loopholes.

“We lost many brothers because of the funds abuse,” he said, “because our hospitals did not have the basic equipment and essential drugs when we had all the resources to save their lives.”

Extensive abuse and arrests

Auditors found that upwards of 720 million kwacha (approximately $915,000)  was spent irregularly or unaccounted for in the country’s COVID-19 response. Within the expenditure, 494 million kwacha was involved in inappropriate procurement procedures, 80 million kwacha was spent on allowances, and 83 million kwacha involved problems in accounting, including 12 million kwacha that simply vanished.

The Ministry of Labour used over 1.4 million kwacha of COVID-19 funds — including Kandodo’s 614,000 kwacha allowance — to finance a trip to South Africa by the labor minister and labor commissioner.

At the Department of Disaster Management Affairs, 11.7 million kwacha cashed out by accounts personnel was not deposited back into the department’s bank account, and over 3 million kwacha was paid to non-existent employees, also known as “ghost officers.” Meanwhile, the education cluster used over 6 million kwacha to purchase personal protective equipment at inflated prices.

The report also found that negligence and holdups by the Ministry of Health headquarters — which received the biggest chunk of the 6.2 billion kwacha, at 1.6 billion kwacha — and the Central Medical Stores Trust resulted in delays in procuring “critical” personal protective equipment. The ministry took 170 days to make a payment for equipment ordered in September of last year, which included face masks, gowns, and sanitizer.

Thus far, over 60 arrests have been made in connection with the abuse of funds, and Chakwera said more could be expected.

“I want all the thieves hiding in the civil service to mark my words: If the finger of evidence points to you as one of the thieves who stole COVID money for saving lives while hundreds of our people were dying of COVID, you are going to prison," he said.

Though some of the county’s donors have welcomed the action taken by the government, local civil society members are more skeptical.

Aurélie Valtat, European Union chargé d'affaires in Malawi, told Devex that although EU initiatives in the country are implemented by nongovernmental organizations, the bloc appreciates the government’s efforts.

“We are glad that the government of Malawi is working so hard to fight corruption, and we have trust in the judicial processes that are happening to fight corruption,” she said.

Maria Jose Torres, United Nations resident coordinator for Malawi, said the U.N. would be increasing its collaboration with the government to ensure that spending on development activities in the country transforms lives and communities.

“The fight against corruption is a collective effort,” she said, adding that “the U.N. is currently assessing how to mount support to the government in [the] form of expertise and experience for institutional capacity building and strengthening accountability mechanisms at all levels.”

However, Gift Trapence, chairperson of the Human Rights Defenders Coalition in Malawi, said current and previous administrations have not done enough to end corruption, emphasizing its connection with political appointments to the public sector.

“We have an anti-corruption bureau that has been more like a toothless watchdog,” he said. “Recruitment of strategic public officers has all along been more politically aligned to politicians’ choices, which results into every government employing people that side with the political system of the time.”

Trapence added that it was up to the current government to fix the system and ensure that Malawians benefit from development funding.

“The abuse of the COVID funds shows that the system is very porous and broken,” he said. “And this explains why Malawi is poor, and this is the very system that we entrust with the national budget.”