We continue to give you a dossier of corrupt scandals by former President Bakili Muluzi as exposed by his close aide Precious Kalonga Stambuli before Muluzi killed him in December 2003. This is Part 5
MALAWI SOCIAL ACTION FUND
MASAF had started off as an emergency social fund to underwrite poverty reduction efforts by targeting the rural household level with basic necessities of water supply, school blocks, primary health care facilities and rural roads. As at 1997, Masaf 11 had been approved and it was to include small scale lending.
Because of the emergency nature of Masaf, it was an essential element that it was immune from bureaucracy and that it was quick disbursing. Despite these features, rules of transparency and accountability were to be applied through a tendering process in the issuing of contracts.
At the time the President lobbied with the World Bank, whose representative was a confessed UDF supporter, to secure a raise in the tender free limit to over a million. The legitimate reason was that there was great need for accelerated construction of schools to cope with demands generated by the free primary schools programme.
In the mean time the President lined up two contractors, namely Kalimambondo Building Contractors (belonging to Mr Malenga) and Katola the Builder (Belonging to Mr Katola who had been twice declared bankrupt in the High Court). The scheme was that these and several other contractors would undertake work for Masaf, which they obtained without tender. On that basis the question of competitive pricing was eliminated, resulting in smaller jobs being undertaken for large amounts of money as long as they remained below K1.5 million.
This scheme became apparent from regular visits to State House from the two gentlemen, and the improved cash flow situation that ensued immediately after their departure. When I became Secretary for Economic Planning I was automatically chairman of the Projects Steering Committee of Masaf. In the course of my regular monitoring duties I made an inquiry, which drew obvious sensitivity from the field officers. It actually became apparent that in the entire country there were seven contractors who had been favoured with what had happened as large amounts of work on paper because of the money they had been paid.
On a daily basis cash diversions estimated at between K800,000 and K1.2 million were being delivered to the Palace. Sometimes in the evening, different campaign groups would arrive to collect their share of the money. This practice continued for more than a year and I remember attending a meeting where the Treasury was being asked to pay K90 million to Malawi Savings Bank for fear of a run on the institution.
MALAWI RURAL FINANCE COMPANY (MRFC)
While I was serving as advisor to the President, a Mr. Manduwa, holder of a BSc in agriculture who was a sympathiser of Muluzi and UDF, approached me. An officail of the Malawi Bureau of Standards who chickened on the discovery that a fertiliser company owned by President Muluzi and Kalaria had had an excessively high rock content, which was scientifically, two times above legal maximum. At the time Mr. Manduwa was senior officer at Optichem, a major processor and supplier of fertiliser in Malawi.
In the meantime I had already been informed that more than half of the cheques from the Malawi Rural Finance Company were made payable to the company, but they were endorsed for deposit in the President’s personal account at Finance Bank.
My inquiry revealed that fertiliser loans were approved much faster and disbursement was quick. In many cases, Kalaria collected cheques from the doorstep of MRFC and delays in payments drew the wrath of the Minister of Finance, at the time, Aleke Banda.
MOVE TO MINISTRY
The above events constitute a small fraction of many events that I witnessed while at State House. In particular, it was the pressure for loans that brought me on collision with political functionaries as well as draining the professional content of my job.
In October 1996, I decided to leave my job. However the President pleaded with me to stay on, and as a compromise I was appointed Government Chief Economist and Secretary for Economic Planning and Development. Although this gave me the chance to move away from State House in Blantyre to the capital, I was required to perform all my duties as Presidential advisor, which meant that I was not completely separated from State House. I personally took it as a breather and part of my transition towards the end of my contract in May 1997.
On 17th March 1997 I submitted a memo to the head of the civil service (Alfred Upindi) giving three months notice that I did not wish to have my contract renewed when it expired. The reason I gave was that I was proceeding to the UK to finalise my PhD.
Almost immediately the President mustered support of the head of the civil service to mount a campaign in my home district. The main goal of the campaign was to confuse people with the message that I had been fired because I refused to assist poor people to get loans. The aim was to undermine my credibility and also pre-empt the consequential damage if I decided to spill the beans.
The campaign was unsuccessful because the same villagers wanted to know why I was still being chauffeur driven in a government car if I had been fired. Those in the district centre wondered why I was still using government fuel requisitions. This was practical because I was serving my notice.
The head of the civil service (Alfred Upindi) hired a journalist from a pro-opposition paper (Chinyeke Tembo of the Daily Times) to run a story entitled “President drops economic advisor”. However, due to poor coordination of the plot a senior editor of the same paper telephoned the deputy head of the civil service who indicated that I had resigned. The news item about my resignation was placed on front page while the other was buried inside, but in the same edition.
At the time of great demand for small business loans, the head of the civil service offered a total of K140,000 to implicate me in a number of politically sensitive allegations. On 8th May 1997, I was called to the Palace to meet the President in the presence of the head of the civil service and the restaurant owner (Ali Mussa from Mangochi). He poured out the following allegations: that I was going round the villages disparaging the President as a Womaniser, that I was going round the villages disparaging the President as an illiterate; that I was going round the villages alleging that the President had failed to run the country; that I was campaigning for presidency.
The most interesting feature of the encounter was that I was never allowed to speak. The President exploded immediately he heard one side of the story. I simply watched the unfolding drama until he asked for my comment. Then I said “What for?” I argued that all I wanted was a response to my letter of resignation, which I had submitted 2 months back. I made it clear that I owed him no explanation. My words were “If you cooked a meal, you can serve yourself”
At that point the President sternly declared, “You will need me” and walked out of the room.