Since the return of multi-party democracy to Malawi in 1994, Malawian governments have undertaken important steps to contain corruption, and every government that has come to power since then has made the fight against corruption a central part of its agenda. Important milestones in the fight against corruption in Malawi are the creation of a number of relevant institutions, laws, policies and strategies, including the National Anti-Corruption Strategy.
The progress in the fight against corruption, however, seems to have stagnated corruption is commonplace with the high levels of patronage and nepotism The latest corruption scandal, Cashagate emerged in the second half of 2013 and has had some important consequences for the country, including the disruption of foreign aid that constitutes 40 per cent of the government’s budget.
During the course of Cashgate, several senior government officials embezzled more than $30 million from state coffers. The donor community, incensed by the scandal, pulled funding out of Malawi, leaving the heavily aid-dependent country with a budget crisis. The scale of the corruption exposed in Cashgate deeply damaged investor confidence, fueling fears that the already impoverished Southern African country with a per capita income of just $250 and a youth unemployment rate over 70% would struggle to attract much-needed investment to drive economic growth and create jobs.
Since assuming the presidency in 2014 after an election win against Joyce Banda, Peter Mutharika promised to root out corruption and restore public, investor and donor confidence. He forcefully pledged to put an end to financial crimes, prosecute corrupt officials and ensure accountability at all levels of government. Recent reforms, including ongoing changes to the state’s public financial management system, indicate that some progress is being made to improve transparency. However, many observers contend that the government has been slow to push through the necessary reforms.
Advances have been made to fix loopholes in the government payment system that previously made it easy for officials to siphon off state funds. Anti-Corruption Bureau (ACB), has had over 70 people involved in the Cashgate saga were arrested. These efforts persuaded the IMF to recently resume Malawi’s $150 million extended facility programme, which had been suspended last year in the wake of the widespread corruption scheme.
Most donors and investors remain unconvinced that president Mutharika’s government is fully committed to fighting corruption. Some of his recent actions are counter-productive and seem to undermine his tough rhetoric on the problem.
Efforts to make the ACB an independent corruption-fighting body have proven futile. The government actively fought to prevent this from happening, but despite their efforts, Mutharika maintains the power to appoint the bureau’s director, which exposes it to political influence. As recently as March 2017 President Mutharika’s party, the Democratic Progressive Party (DPP), killed a parliament bill aimed at making the ACB more independent. Mutharika’s government is allegedly meddling in the ACB’s work against Bakili Muluzi, Malawi’s former president, who is accused of stealing $11 million in donor funds during his tenure between 1994 and 2004.
Malawi remains one of the least developed and most corrupt countries in the world. The Corruption Perception Index (CPI) published by Transparency International ranks Malawi as 112th out of 167 countries. With little government revenue generated locally, Malawi depends on donors who inject at least 40% to its budget. Malawi also performs poorly on most human development indicators such as education and life expectancy, pushing its ranking to 173th out of 188 countries on the Human Development index (HDI).