May 10, 2012

Finance Minister rejects resignation demands

Finance Minister Ken Lipenga has said he had done nothing wrong and he was not prepared to resign from his ministerial job in the wake of revelations that Malawi's tax collecting body, the Malawi Revenue Authority (MRA), borrowed money to present a picture that the late president Bingu wa Mutharika's experimental Zero-Deficit Budget (ZDB) was working. "I did nothing wrong, what I told Parliament were figures presented to me by my officials," he said.

Lipenga has come under pressure to resign when he revealed that MRA borrowed 15bn Malawi kwacha from commercial banks to spruce up tax collection figures. Opposition Malawi Forum for Democracy (MAFUNDE) MP George Nnesa challenged Lipenga's figures, saying he had information MRA borrowed money to dupe Parliament and the nation that ZDB was working. Then ruling Democratic Progressive Party-dominated Parliament harangued Nnesa to provide evidence and thwarted all moves to investigate the matter.

But in a dramatic turn of events Lipenga, who retained his job in the new Joyce Banda administration, admitted after investigations he has realised MRA Commissioner General Lloyd Muhara and some officials in his ministry went behind his back to borrow the money.
"I honestly didn't know what was going on but, as minister, I take full responsibility for this," he said. Lipenga, a former academic and journalist, said new information was coming in the fore and he would brief the president.

Key officials in the Ministry of Finance during the Mutharika administration were Secretary to the Treasury Joseph Mwanamveka - now sacked - and Budget Director Dr. Dalitso Kabambe who famously praised the Zero-Deficit Budget that it was performing wonders. But on the ground the Zero-Deficit Budget, which didn’t factor in any donor inflows, was punitive as it introduced new taxes.

President Mutharika was forced to experiment with the Zero-Deficit Budget because his abrasive politics had run Western donors out of town. Most bi-lateral donor countries and multi-lateral agencies had either suspended or completely cut off aid to the impoverished southern African country because of deteriorating political and economic governance. Most of them have embraced the new Banda administration. (Maravi Post)


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