When You Kill Ten Million Africans You Aren’t Called ‘Hitler’

image from Mad Monarchist http://madmonarchist.blogspot.co.uk
Image from Mad Monarchist

Take a look at this picture. Do you know who it is?

Most people haven’t heard of him.

But you should have. When you see his face or hear his name you should get as sick in your stomach as when you read about Mussolini or Hitler or see one of their pictures. You see, he killed over 10 million people in the Congo.

His name is King Leopold II of Belgium.

He “owned” the Congo during his reign as the constitutional monarch of Belgium. After several failed colonial attempts in Asia and Africa, he settled on the Congo. He “bought” it and enslaved its people, turning the entire country into his own personal slave plantation. He disguised his business transactions as “philanthropic” and “scientific” efforts under the banner of the International African Society. He used their enslaved labor to extract Congolese resources and services. His reign was enforced through work camps, body mutilations, executions, torture, and his private army.

Most of us – I don’t yet know an approximate percentage but I fear its extremely high – aren’t taught about him in school. We don’t hear about him in the media. He’s not part of the widely repeated narrative of oppression (which includes things like the Holocaust during World War II). He’s part of a long history of colonialism, imperialism, slavery and genocide in Africa that would clash with the social construction of the white supremacist narrative in our schools. It doesn’t fit neatly into a capitalist curriculum. Making overtly racist remarks is (sometimes) frowned upon in polite society, but it’s quite fine not to talk about genocides in Africa perpetrated by European capitalist monarchs.

Mark Twain wrote a satire about Leopold called “King Leopold’s soliloquy; a defense of his Congo rule“, where he mocked the King’s defense of his reign of terror, largely through Leopold’s own words. It’s 49 pages long. Mark Twain is a popular author for American public schools. But like most political authors, we will often read some of their least political writings or read them without learning why the author wrote them (Orwell’s Animal Farm for example serves to re-inforce American anti-Socialist propaganda, but Orwell was an anti-capitalist revolutionary of a different kind – this is never pointed out). We can read about Huck Finn and Tom Sawyer, but King Leopold’s Soliloquy isn’t on the reading list. This isn’t by accident. Reading lists are created by boards of education in order to prepare students to follow orders and endure boredom well. From the point of view of the Education Department, Africans have no history.

When we learn about Africa, we learn about a caricaturized Egypt, about the HIV epidemic (but never its causes), about the surface level effects of the slave trade, and maybe about South African Apartheid (which of course now is long, long over). We also see lots of pictures of starving children on Christian Ministry commercials, we see safaris on animal shows, and we see pictures of deserts in films and movies. But we don’t learn about the Great African War or Leopold’s Reign of Terror during the Congolese Genocide. Nor do we learn about what the United States has done in Iraq and Afghanistan, potentially killing in upwards of 5-7 million people from bombs, sanctions, disease and starvation. Body counts are important. And we don’t count Afghans, Iraqis, or Congolese.

There’s a Wikipedia page called “Genocides in History”. The Congolese Genocide isn’t included. The Congo is mentioned though. What’s now called the Democratic Republic of the Congo is listed in reference to the Second Congo War (also called Africa’s World War and the Great War of Africa), where both sides of the multinational conflict hunted down Bambenga and ate them. Cannibalism and slavery are horrendous evils which must be entered into history and talked about for sure, but I couldn’t help thinking whose interests were served when the only mention of the Congo on the page was in reference to multi-national incidents where a tiny minority of people were  eating each other (completely devoid of the conditions which created the conflict no less). Stories which support the white supremacist narrative about the subhumanness of people in Africa are allowed to be entered into the records of history. The white guy who turned the Congo into his own personal part-plantation, part-concentration camp, part-Christian ministry and killed 10 to 15 million Conglese people in the process doesn’t make the cut.

You see, when you kill ten million Africans, you aren’t called ‘Hitler’. That is, your name doesn’t come to symbolize the living incarnation of evil. Your name and your picture don’t produce fear, hatred, and sorrow. Your victims aren’t talked about and your name isn’t remembered.

Leopold was just one part of thousands of things that helped construct white supremacy as both an ideological narrative and material reality. Of course I don’t want to pretend that in the Congo he was the source of all evil. He had generals, and foot soldiers, and managers who did his bidding and enforced his laws. It was a system. But that doesn’t negate the need to talk about the individuals who are symbolic of the system. But we don’t even get that. And since it isn’t talked about, what capitalism did to Africa, all the privileges that rich white people gained from the Congolese genocide are hidden. The victims of imperialism are made, like they usually are, invisible.

After suspension of oil and gas exploration licences in Malawi what happens now?

Anglo American Corporation was founded in Johannesburg in 1917 with £1 million (what today would have been £75 million, adjusting for inflation according to one inflation calculator).

AngloAmerican

It has since grown into a publicly traded behemoth with a market capitalisation of £31.2 billion and revenues of £29.3 billion (2013). It’s headquarters is now in London and the company is now known as Anglo American Plc, the fourth largest mining company in the world.

Although a net ‘loss’ of $961 million was declared in 2013, Anglo American is undoubtedly one of the big boys in the industry. To give you a scale of just how big they are, Anglo American Plc owns 85% of Luxembourg registered De Beers Investments, the holding company of De Beers, another prominent mining giant which is well-known in Southern Africa. But if that’s not convincing enough then how about this: Anglo American recently walked away from a gold interest worth $300 billion, after investing over $541 million it it. Apparently, the withdrawal is related to environmental risks, in particular the threat the Pebble Mine would pose to Alaskan Salmon (there’s even a campaign), although Anglo’s chief executive claimed the withdrawal was in fact a way of prioritizing “.. capital to projects with the highest value and lowest risks.”

Both Anglo American and De Beers have been criticised over their practices in Africa, including price-fixing, low wages (for Anglo American recently in Chile here) and lack of transparency. In particular, according to a Wikipedia entry:

In 1977, the company [Anglo American] demanded that the paper it owned, Rand Daily Mail, tone down its equal-rights support after exposing the murder of South African activist Steve Biko amid the subsequent government backlash. [words in parenthesis for clarity]

Further, a British charity, War on Want, published a report in August 2007 that accused Anglo American of profiting from the abuse of people in the developing countries in which the mining giant operates. According to War on Want:

“in the Philippines and South Africa, local communities threatened with Anglo American mines have faced severe repression in their fight to stay on their land, while in Ghana and Mali, local communities see little of the huge profits being made by AngloGold Ashanti but suffer from fear and intimidation and from the damaging impact of its mines on their environment, health and livelihoods”

In response, the company subsequently published a report defending itself and disclosing its finances.

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Malawi’s first president Dr Hastings Kamuzu Banda could have begun a state owned mining company in Malawi in the late 1960’s. He could have hired specialists from abroad, bought equipment from Britain or the US, begun prospecting for minerals, and by 1970 laid a foundation for a functional mining industry. The technology was available, and when Malawians had been travelling to South Africa in their thousands to work in the mines, labour would not have been a problem.

Banda didn’t begin a mining company. Instead he focussed on agriculture, which traditionally does not reap large profits as the sort which mining companies the likes of De Beers and Anglo American have been known to reap.

That decision could be a contributory factor further explaining Malawi’s economic woes today. While others were investing in assets and initiatives having huge long-term yields, Malawians were dabbling with agriculture and tobacco.

But to give him credit, while Dr Banda could have thought mining was not a priority to the newly independent country, he must have known that Malawi didn’t have enough capital resources to waste on ambitious projects whose very returns were unknown if not a gamble?

Further, having just broken away from the Federation of Rhodesia and Nyasaland, it’s understandable that while Britain could have been willing to extend Malawi a line of credit, as single-minded as Banda was known to have been, it’s inconceivable to think that he would have wanted to be constrained by such kind of favours from the very same people he so vehemently denounced. As he once declared: “We have no minerals. The soil is our gold mine”. In any case, what did a medical doctor who barely 10 years previously had been running a clinic in London know about the mining industry of the 1950’s and 60’s.

Having said this, would Dr Banda have started a state-owned mining company if he knew what treasures lay beneath the surface of Malawi’s geology? If he knew the value of such treasures on the international market?

Especially since there was information available as early as 1966 as to the Mineral deposits and mining potential of Malawi, according to a research paper titled MINERAL RESOURCES OF MALAWI AND MINING POTENTIAL by Rodney Mshali (The Society of Malawi Journal Vol. 62, No. 2 (2009), pp. 27-35 published by: Society of Malawi – Historical and Scientific ). Banda could have decided to take the risk if he wanted to.

Mineral Deposits

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Whichever way, it’s not my place to make a determination on Dr Banda’s judgement at this time.

But what does all this have to do with the current mining landscape in Malawi?

Well, as can be seen in the following links in Zambia, Chile, South Africa and Ethiopia , some mining companies have been known to be a menace to the countries they operate in. Issues of ownership, corruption, tax evasion in the form of profit shifting, low pay and poor working conditions, and of environmental degradation are often always lingering. In Malawi, recently, it has emerged that Paladin was considering to discharge ‘contaminated’ sludge kept in a dam near its Kayelekera mine into Malawi’s rivers systems for fear that if they did not do so, the rain season would cause their dam to overflow.

Thus, when news broke just under two weeks ago that the government of Malawi had suspended all oil and gas exploration licenses on Lake Malawi, so as to allow government to scrutinise and review each Licence that was issued or signed, I didn’t really know what to make of it. After all,  Malawi has had its fair share of sorry episodes of bad contracts married with irresponsible management, with the Paladin saga at Kayelekera. Although appearing diligent, uncovering any such lax agreements will just remind us all how deep in muck the country really is. It will not be a cause for celebration.

So then, what will the government do?

If they plan to review the oil exploration licenses in all good faith, and if necessary use legal mechanisms to resolve any indications of foul play -including unfair or prejudicial contract terms that do not benefit Malawians; if they plan to bring the miscreants to justice, then the suspension is a noble move.

In addition, the government of Malawi could work with charities [such as SHERPA (France), the Center for Trade Policy and Development (Zambia), the Berne Declaration (Switzerland), l’Entraide Missionnaire (Canada) and Mining Watch (Canada) ] which in 2011 filed complaints against mining companies Glencore International AG and First Quantum Minerals Ltd, to the Swiss and Canadian National Contact Points (NCP) for violating the OECD guidelines for multinational enterprises including for Tax avoidance in Zambia.

However, if the suspension of oil and gas exploration in Malawi is a veiled attempt at ‘rent-seeking’, as is rumoured to have taken place not only during Bingu Wa Mutharika’s regime, but also during the People’s Party administration, then it would be unfortunate because the government would have lost an opportunity to harness the resources that Malawi has. DPP would have lost a chance to show transparency.

One more thing; how can Peter Mutharika be sure that the value of assets or mineral resources declared by Oil companies interested in prospecting, or already prospecting is accurate, and not under-declared/under-valued ? For example, if the actual value (or near estimate) of viable crude oil deposits under the basin of Lake Malawi was US$400 billion, what is to stop the Oil companies holding the exploration licenses from misinforming the government that they had found only US$100 billion worth of confirmed deposits under the lake? Especially when the government was unable to verify those figures?

Wouldn’t an independent state-owned Mining company, that had its own equipment, and that owned a stake in each exploration site, and that was jointly involved in the exploration, so as to be able to verify the findings by its own independently undertaken mapping and surveying reduce such a risk?

Finally, it goes without saying that for them to be successful, any state-owned organisation (including parastatals) should be run and managed by people who by merit are fit to do so, and not by public appointees with little or no experience in the relevant technical field or area.

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Congratulations Mr President – Where does Malawi go from here?

APMMy congratulations to President Arthur Peter Mutharika (APM) for winning the 2014 presidential elections in Malawi are aptly late. Over 2 months late – I’m somewhat embarrassed, but just as the lateness was not entirely of my own doing, maybe as a consequence of it (possibly even in spite of it), a lot more thought has gone into preparing these ‘congratulations’ than would have been the case if I had offered them the day APM claimed victory. Had I made haste, the congrats would have been too brief and would lack substance.

In earnest, this post is more of a call to action than an expression of pleasantries. And what better time to do it than when the President is in the US, to meet Barack Obama at the first U.S.-Africa Leaders Summit. Pardon me for comparing the picture of 50 African leaders congregating in Washington DC to meet a US President, with governors being summoned to Rome to meet the Emperor, a summon by the Emperor to rulers of the provinces.

Except in this picture, the United states is not really an empire in the classical sense (if we ignore the economic sense for a moment). Neither are the 50 countries which have been invited to Washington, and are sending  their leaders, governors of US provinces. So the question is, why comply to such a request at all?

The simple and shortest answer is DOLLARS. Our world is controlled by the stuff. And even though the institution that issues currency in the US is essentially a private consortia of unknown entities (they are secret), the scheme of things is that most parts of the world today are currently dancing to the tune of Washington (and possibly to the tune of those who lend to Washington) , in the same way as at the height of the Roman empire, a large part of the civilised world did what Rome said, and were subjects to the political and economic power of ROME.

And while the rise of China could curb the dollar dominance, that’s not really what I want to talk about today.

1. Priorities

Mr President, as a well-educated man, I’m sure you know that there’s nothing wrong with Malawi forming alliances with bigger and more powerful countries. It is beneficial because such alliances can provide access to capital, if not attract inward investment (Your inaugural speech touched on this). Further they are potentially a conduit of technology transfer – which could have huge benefits for a country like Malawi.

Malawi needs developed allies, whether they are from the East, West, North or South.

However, who ultimately benefits from these alliances? Who gets the lion’s share? Are these deals really win-win situations? Could they be made to be win-win situations if they are not? Or is the bigger player benefitting more than the smaller player?

For example if a Chinese or American company invests $300 million into Malawi’s railway infrastructure, mining or agricultural sector, how much of that investment will genuinely foster long-term sustainable growth? A kind of growth in which ordinary Malawians are set to genuinely benefit from the deal? In layman terms, we might ask how many people will have their livelihood transformed by the investment such that they achieve or are likely to achieve long-term financial independence?

I think these questions must be asked, and addressed because it probably will not be of significant benefit to Malawians, if investors are persuaded to invest, but there is no strategy to safeguard the long-term rewards of the investment to ordinary Malawians.

An effective system needs to be created and implemented whereby revenue sharing (between investors and the government / local people) is as much a priority as the luring of investors. Maybe a good place to start would be to create investment organisations or government agencies such as this one in Angola, whose task is to iron out investment rules and create a win-win strategy. Indeed the rhetoric between Beijing and Luanda has increasingly been of creating ‘win-win’ business partnerships.

Malawi should learn something from such partnerships.

This is what most major powers today did in the heydays of their economies. Japan has these agencies, Britain established them many years ago, Germany has them (and has large manufacturing and investment zones which are testament to the success of these agencies), even China has a good number of them. And if you look at younger economies, like Australia and New Zealand, even there you’ll find them. Thus, it’s no surprise that a country such as Iran operates a few of these vehicles. With that benefit of hindsight, is it not important for Malawi to develop Government investment agencies?

2. Education

The technical projects of Bingu Wa Mutharika’s government were an excellent idea. And it is in your government’s best interest if these were successfully completed. We need more high quality educational institutions that will train our workforce, and empower them with skills that they will need to do their jobs well. Transferable skills which they can use in various scenarios. For this to happen we need to train teachers and lecturers abroad, to access this knowledge and impart it on our students. We also need to attract foreign specialists who already possess this knowledge, and bring them to Malawian institutions so that they can impart their knowledge onto our students. We need to broaden the subjects on offer at our institutions, and we need to make higher education more accessible. Here, the use of technology may be useful, in that video technologies that allow the creation of  ‘virtual classrooms’ could provide an excellent (and cheaper) way of technology transfer. Here also is the need for equipment most paramount. Your government would be best advised to source as much educational equipment from other countries or educational institution as can be possible. This can be a real game changer in terms of the quality of graduates we train.

3. Corruption

Mr President, if there’s one critical limiting factor to Africa’s economic development, whose negative effects don’t need re-articulating, it is corruption. The practice is killing the continent. And if nothing is done to curb the prevalence, and extent, we will never catch up with the rest of the world. In Malawi, the Cashgate crisis has put this issue in sharp contrast. And an opportunity has arisen in that addressing corruption in Malawi could close the loopholes for good, safeguarding public funds, and paving the way for sustainable economic development. It is crucial that the perpetrators of the Cashgate scandal be brought to book without selection or bias because this will give people confidence in your government. It really is in your best interest that our government in Malawi becomes clean. A cleaner government is a stronger government. And a stronger government has a better chance of creating and maintaining a strong economy, than one which is inherently corrupt. Examples of this relationship stretch from recent governments in Norway, all the way back to the Roman empire I referenced to above.

4. Unity

Bringing in Muluzi into government was a good and commendable gesture. Although many people I’ve spoken to have doubted whether he has the experience for his current office, I think having him in government is a positive thing. But that aside, I think trying to find common ground, and inviting the opposition into government should go much further. There are many talented people in Malawi. Proud Malawians who have immense talents – but who are not utilised and therefore feel left out. Maybe the creation of Parliamentary committees enables participation on some level, but more must be done. I’d think new blood like Juliana Lungudzi and several other young politicians could do more if entrusted with responsibility within government. Why? Because Malawi needs fresh ideas, and different people have different ideas they bring to the table depending on their experiences. Yet ultimately, we all want Malawi to develop, to do better, so it would be in our own interest if everyone participated. I urge you Sir, to empower this parliament to be different, to be united and a force for good on behalf of ordinary citizens. The way to do that is to keep the legislators busy with meaningful projects that have a real prospect to effect change. And to keep jealousy firmly locked out.

5. Federal System of Governance

This goes without saying, but power shared is responsibility shared. There’s little justification why a country the size of Malawi with a population over 13 million should restrict itself by virtue of its system of government. And one man can never fully cater to the needs of 13 million people. Neither can 192 people – no matter how prolific – do enough to improve the lives of so many people. A Federal System could change that. It will bring more people into participation in the building of our economy, and the power bestowed upon them will enable them to undertake projects free from the control or bureaucracy of a centralised system. Across the world, there are many examples of countries with Federal Systems that work far better than those with centralised systems, and as an expert in law, I’m sure this issue is evident to you.

6. Infrastructure

See this and this (which includes a reference to the Shire-Zambezi Water Way). Increased infrustructure will open our continent up, and make it easier for people to do business. It will also lower the associated costs of investment – a factor which could attract more investors.

7. Investment into Manufacturing and Business

In order to be less reliant on products sourced from outside, we need to develop our own manufacturing sector. Why should we buy from outside things which we can make or source quite cheaply within our own borders? With tobacco earnings set to drop, now could be the time to diversify into manufacturing. After all, China is increasingly becoming an expensive destination for western companies – many are looking for alternatives. Creation of incubation and business centres is also a necessary prerequisite to sustainable economic development. If you make the cost of doing business low in your country, many people will flourish and reward your government handsomely in increased tax contributions.

8. Subsistence farming and preservation of Small Industries

There are lessons to be learned from the Farm Input Subsidy Programme. And your government would be best advised to listen to what the people want. Thus, how many fishermen who currently use canoes for their trade would do better with a boat? How many farmers who use hoes to prepare the fields could benefit from a cooperative that lends out a tractor? Similarly, what should the government do to help industries such as these:  How second-hand clothes kill business for Malawi’s tailors.

9. Accountability

Our culture of accountability needs to be restored in Malawi. People should not do wrong (be it in a parastatal or top civil service position) and think they can get away with it. A good way forward would be for regular performance reviews not only for ministers, but also ordinary civil servants, preferably to be undertaken by external auditors (to minimise the prospect of favouritism developing into self-accountability). That way we would be replacing entitlement (where people think they have a right to a job – even when they are not qualified for it / when they are bad workers) with accountability. Similarly, it must never be right for an investor whose company has earned millions of dollars through doing business in Malawi, to evade tax, legitimately, on Malawian soil. The loopholes need to be closed shut.

10. Increased Trade with other African countries.

I urge you sir to be an advocate of the Africa brand. We need to import more from our immediate neighbours than from farther afield. We need to lobby the west to act in reducing cost of remittances. We need Africans to do more business with other Africans. See this for more information.

11. Security and Safety

We need to restore our confidence in the police. Malawi needs more security, not only along our borders but within our towns and cities. People in Malawi don’t feel safe anymore. Not like how safety used to be defined in the 70’s and 80’s. If we can’t afford police cars, let the government buy our police officers motorcycles (which are cheaper to run), so that they are able to respond to calls for help.

12. Investment in International markets

Malawi and other African countries need to invest in international markets. This should be a strategic and long-term initiative. We need to create organisations that invest in global companies around the world, so that the dividends therefrom are wired back to our countries in Africa, boosting our economies, and thereby contributing to our continent’s economic growth. Just see this article titled Bleeding Money: Africa Is A Net Creditor To The World, Illicit Outflow Actually Exceeds Inflow Of Aid, Investment, to understand why this is necessary. It’s urgent.

Mr president, Malawians are looking up to you now. They need leadership accompanied by action, and less of the empty promises of previous regimes.

Once again, congratulations Mr President Sir!

 

 

 

 

 

 

Economic Empowerment

mg2I hate to be the bearer of bad news but I’m not sorry to be the one that spoils the party. Especially this particular party…because while Malawi is currently heated with election campaign fervour, some of the events happening on the ground have caused one part of me to doubt whether much substance will in fact come out of the leadership that will be appointed after the 20 May elections.

Are we really going to see the transformation being excitedly predicted by each party’s honchos? What kind of transformation will we see? Are the parties really going to deliver what they have promised in their manifestos? Weren’t similar promises made during the election campaigns of 1994, 1999, 2004 and 2009? To what extent were those promises honoured? So then, what major transformation came out of the administrations who won those elections?

I think no matter who you choose to vote for, it would be wise to be cautious, and carefully examine each candidate on their merits, and what their track records in terms of actual achievements the last 5 – 10 years (not just the last year or two) have been…

Many a times I have waxed lyrical as if on a soapbox about economic empowerment of Africans, and many a time, I have not exactly got through to the right people. Which is okay. The right people are rarely in the right jobs, they are rarely listening.

But this is an issue that has to be addressed sooner or later, otherwise African countries will continue to struggle with poverty and other ills. Donors and foreign corporations will not tackle the issue of empowerment because it’s not always in their best interests, and they are not good at doing so [See this: Between the Elusive and the Illusionary: Donors’ Empowerment Agendas in the Middle East in Perspective – Mariz Tadros].

In Malawi most NGO’s do not have the power, nor are they sufficiently well resourced to influence the establishment of a nationwide empowerment initiatives that have a real chance to make a big enough impact. It’s all down to the government and MP’s, and for what it’s worth one part of me can’t see enough progress being done after the elections. Maybe I’m being unfair and prematurely judgemental, but I’m yet to be convinced whether any of the major parties truly can deliver what they promise. And this is not only because the practicality of what they promise in their manifestos is questionable but also because the vagueness of some of the promises render them useless.

But for those voters who are listening, and concerned, the important questions every Malawian should ask the candidates of the 20 May elections, before voting, are these:

What will they do differently to ensure that Malawians are economically empowered, and not taken advantage of? And why should we trust you?

This is important especially because it is clear to most Malawians that the tenures of the MCP, UDF, DPP and PP governments in the past have established very little for Malawians to show for. While countries like Kenya, Zambia, Rwanda, Ethiopia and Mozambique (where there was a debilitating 15 year long civil war) have powered forward with impressive results, Malawi, despite unsustainable blips of progress, is still languishing in the doldrums.

So, what will the candidates who vie for election to Parliament do which hasn’t been done already in the country’s 50-year-old history?

The reason that this question must be answered is that economic empowerment will not occur if the policies the new government institute turn out to be mediocre (like distributing cattle, chickens, houses or shoes) or the same as what has not worked in the past, and if corruption continues to be tolerated. In a country with 15 million people, the presidency would be best advised to think on a much larger scale, than wasting resources on mediocre projects.

Taking a simplistic general view, for people to be innovative and industrious they require one or more of the following:- an income, education, inspiration, tools/ building blocks (trucks, implements & equipment), and power (literally electricity). So, one would think that when a government articulates how they will provide these as part of a wider national transformation strategy, there will be a much higher chance of transforming Malawi than say distributing a million cows to villagers.

But that alone is not enough. Empowerment essentially means giving one power or authority to do something. So I’d like to see factories built, where young people can work, earn an income and develop transferable skills. And those factories, must be majority owned by Malawians, so that the profits made from Malawi stay within Malawi. Further, instead of giving a mining contract or power generation contract to a foreign corporation – which has its own interests, I’d like a government that promises, and implements a national  mining company, or power generation company, which is government owned, and whose profits are reinvested into Malawi.

That is precisely the kind of visionary leadership Malawians should seek and vote for.

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Another reason why Africans should own their own resources

man-40134_640Last week a well written article appeared on Al Jazeera arguing against the false and somewhat misleading picture of Corruption that is often put out by the western media. In it, it was suggested that over $900 billion a year is lost from developing to developed nations through tax evasion and illicit financial outflows. While this is a major problem for Africa, as was pointed out several years ago by Kofi Annan here, another reason which results in these outflows is that very few major industry (million dollar revenue generating) in Africa is in fact owned by Africans.

The combination of imperialist colonial legacies, poverty, a lack of capital, insufficient education, corruption, plain hypocrisy and other factors has resulted in a state of affairs whereby even capable Africans find it hard to buy into and run their continent’s biggest industries. While there are many Africans doing well in business throughout Africa, they are by far in the minority, and comparatively too few of them on the ground, than say the number of Canadians who own and control multi-million pound ventures within Canada, or say the number of Portuguese who own and control multi-million dollar companies in Portugal.

Thus, this picture inevitably creates an opportunity or gap for foreign corporations and investors to come in, and sweep away ownership of the whole lot – armed with huge amounts of capital. No surprise the profits end up everywhere else but in Africa…

In my view, far from the land grabs of Robert Mugabe (which others have tried to justify – see here and here), another reason in support of more Africans owning their continent’s industry is that doing so could mean that large amounts of money remain on the continent, to be used for education, health  -building hospitals and providing good wages for doctors, eliminating poverty, fighting corruption, policing and security, building infrustracture, improving the plight of women, investment in the youth, creating jobs, etc. It means essential capital is not being wired out to already rich countries. This in my view is a better strategy against poverty, than aid and handouts, whose monies are comparatively miniscule to the monies being siphoned from Africa.

According to the website of Britannia Mining Inc (a US company with operations in Canada and Malawi) here, the Nthale Iron Ore surface deposits which they found before 2009 are estimated from their geological survey to be at least 4.6 million tonnes in quantity. As often happens with these things, especially if we focus on the word ‘Surface’,in practice the deposits can be far larger than the estimate.

Last Friday, on the 7th of February 2014, before close of trading the price of Iron Ore on the international market was hovering around $125 per ton (see latest figures here). Whichever way this price goes (whether up or down) the next few years, 4.6 million tonnes at $125 per ton is still worth at least $575 million, a hefty sum by any measure. Even if we go with the 68% iron ore component indicated on their website, that’s still worth $391 million

Suppose Britannia Mining invested $100 million into Malawi, to cover processing the Ore, overheads including construction, logistics, wages, corporate governance activities, etc, (and it was proved that they had indeed invested such sums because sometimes businessmen overestimate the level of investment when the truth is much lower) I’d think the benefit to the Britannia would be significantly higher and disproportionately in their favour than in the favour of Malawians. Looking at previous examples of resource conflicts involving corporations in Africa, I seriously doubt that first they would invest such sums. Further, I doubt that Malawians or the Malawian government would benefit equally or at least proportionally from the resource. Which begs the question, who actually owns the resource?

As many others have opined elsewhere (see this for example), the unrestrained greed and unguarded capitalism of western businesses in Africa is causing a lot of damage and harm to Africa, and Africans. And that’s even before we get to what China is doing…

Even if the market price of Iron Ore dropped to say below $100, (say it dropped to $65, which is highly unlikely – the last time it hit $100/ ton was back in Aug 2012, and that was only for a very brief period of time), there would still be at least $300 million worth of deposits to be mined.

Don’t you think if the company that was exploiting the deposit was owned or part-owned (say 50%) by the Malawian government, or a group of Malawians, that the majority of the benefit of the resource would remain in the country, as opposed to being wired out of Malawi?

Post Paladin, and the tax outrage they caused when it was revealed that the Malawian tax authorities were missing out on tax revenues worth $200 million, how much tax have Britannia paid to the Malawian government so far, and how much have they made out of Nthale? The reason that question is crucial is because no level-headed Malawian is keen to see Malawi descend into a chaotic easy target where rich corporations (which are already wealthy and well resourced) come into the country and make billions, while the local population remains poor.

And if governments across the world do not speak against unrestrained greed, who will, seeing most governments in Africa are headed by people who have neither the will nor inclination to do so…?

Kenyatta + Branson
image from https://www.facebook.com/myuhurukenyatta

In my view, Africa needs trade partners who will help rebuild the continent, and not those looking for a quick buck, irrespective of the ethics of the means of acquiring that buck.

If you are looking to make money quick, stay away from Malawi. We don’t want get rich quick capitalists or investors. What Malawi needs are Responsible Capitalists, as opposed to a Liberal and unguarded Capitalists – a badge which brings to mind Halliburton’s Iraq heist (or even ILLOVO’s tax avoidance fiasco –  ILLOVO [which is British owned via Associated Foods Limited] is  company that last year posted a 43% rise in profits per share), an incident which it is fair to say has probably been responsible for not only much suffering, but also global unrest.

Depending on who you ask, its undeniable that corporate wrongdoing is currently happening, and the continent of Africa is being systematically ripped off. Yet there has to come a time when the tide turns, and the wrongdoing is forced to stop (sadly it’s not going to stop voluntarily). In the words of the African Development Bank president Donald Kaberuka here:

“The reality is, Africa is being ripped off big time …Africa wants to grow itself out of poverty through trade and investment – part of doing so is to ensure there is transparency and sound governance in the natural resources sector”

In my view this means rectification, and possibly includes learning lessons from those whose policies do not exacerbate the already bad situation; lessons from the likes of Brazil instead of blindly accepting unfair and discriminatory terms from organisations such as the IMF – whose policies towards the poor countries couldn’t be said to be favourable for local ownership of industry.

Maybe Malawi’s mining sector has more to learn from the likes of Vale and Debswana. Debswana is 50% owned by the Botswana government and 50% owned by De Beers. Vale is the world’s biggest producer of Iron Ore, and their profits recently doubled (Interestingly, in the same article Vale says the price of Iron Ore would hit $130 per ton, which it did, confirming the plausibility of my above little theory). They’ve seen an increase in production, which last year hit 73.4 million tonnes of Iron Ore. They are also a major tax contributor to the Brazilian government, with recent tax payments of $9.6 billion, far greater than anything any corporation have had to pay to an African government.

Similar

Renewable Energy in Malawi? A Sustainable Future for the Warm Heart

A sustainable future is something we should aspire to. Expending natural resources in order to provide energy is a worldwide problem. In Malawi, the Warm Heart of Africa, only about 9% of the population has access to electricity. Electricity in Malawi is controlled entirely by The Electricity Supply Corporation of Malawi (ESCOM) , a company owned by the government. This government-owned entity controls all of the power centers in all of Malawi. ESCOM provides limited electricity that is out of the financial reach of the majority of Malawi’s 16.7 million people. A lack of electricity has created additional problems within Malawi, as satisfying the energy needs of so many people has inevitably led to the exhaustion of natural resources. [with minor edits]

More at Renewable Energy in Malawi? A Sustainable Future for the Warm Heart  via http://worldcampforkids.blogspot.co.uk

Reuniting Africa: Infrastructure

It was delightful to hear news that Kenya in collaboration with the Chinese government will be investing $13.8 billion to build a railway line to link its port city of Mombasa with the capital Nairobi. It is hoped that the line will eventually extend to the landlocked countries of Uganda, South Sudan and Rwanda. This is great news not only because of its Pan-African connotations, but also because it’s a step forward towards getting Africa’s infrastructure interconnected and closer to global standards ( for example to the level of the Eurotunnel).

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Whenever foreigners come to Africa to visit, they always exclaim how challenging and long it can take to get from one place to another in certain areas. It’s incredible how disconnected Africa remains. The same applies to movement of goods (a factor essential for commerce and business). Often and comparatively with say Asia, it takes longer (and costs a lot more) than must necessarily be to send goods, or receive goods from one African country to another, which is not desirable.

The vastness and distances may be a problem, and environmental degradation such projects cause is also a major consideration, but that doesn’t mean that there are no workable solutions to such challenges. Often the cause of inaction or lack of progress appears to be bad politics and selfish financial interests, which end up  frustrating well-meaning projects whose economic and social benefits could be significant for a country and its neighbours, and far outweigh the negative impacts.

Take Malawi for example. Mota Engil the Portuguese conglomerate was contracted by the government of Bingu Wa Mutharika to construct a port in Nsanje (see animation of the Nsanje Inland Port via YouTube), at great expense to the Malawian tax payer.

The  project was part of a project known as the Shire-Zambezi Water Way, and whose total cost was said to be US$6 billion would have reduced the cost of importing goods by 60%.

The Malawi section of the project took years to build, and costed the Malawian government €25 million dollars. Now, almost 2 years after the sudden death of Mutharika, the first ship is yet to sail to the port. There is little or no dialogue about the way forward, the current Malawian president is in no rush to resurrect the project, even when the Malawi Trade & Investors Quarterly Magazine in 2007 wrote that Malawi spends at least US$200 million annually to import or export goods via ports in Mozambique or Tanzania. My question is this: isn’t reducing the cost of imports for landlocked countries in Africa a priority to the whole of Africa? Shouldn’t it be a priority to all Africans? Think about it… look at the US, or for that matter the European Union, and their policy of free movement of goods.

How can the countries in Africa, let alone the continent ever develop when leaders do not collaborate or are only too willing to impede such meaningful projects before they even commence? Why can’t African leaders (including the chiefs of the African Union, SADC, COMESA and African Development bank) begin to practise continuity, and put pressure on the stakeholders to get to grips with the project? Of the countries who signed the memorandum of understanding of the Shire-Zambezi Water Way, why does it appear like no one is actively seeking to resurrect and resume the project ( Is the said feasibility study Mozambique was demanding underway? If so what is the progress on that front?), since it’s undeniable that there will be mutual benefits to the greater economy of Southern Africa?

Looking at half-hearted comments from those who think they have something to lose (other shallow comments from here), you will find that the Mozambicans have to shoulder part of the blame for the stalling of the project. Against all appearance of conventional wisdom, it seem they have been dragging their feet from throwing full support behind the project, with talk of environmental assessments, etc and greater emphasis of development of roads?? Can such a massive project have been commenced and physical construction at Nsanje began without first assessing or undertaking an environmental assessment?

I’m not convinced. Either there’s something about this project that ordinary folk like us have not been told, or there was a massive miscalculation on the part of Mutharika to begin building the port. Else, it was visionary (see YouTube marketing clip ‘overselling’ the idea here), a quality often lacking within leadership across Africa.

Having said that, it is more likely than not, that the reason some people in Mozambique are unwilling to fully support the project is to do with the alleged financial loss they expect if goods are able to go straight into Malawi or Zambia and Zimbabwe, and not via Beira or Nacala.

Such a selfish narrow viewpoint undermines any potential benefit a new transportation link may create for the region. Surely, a thoughtful and better-informed African leader would have recognised the overall impact (e.g. jobs, increased trade, tourism, easier flow of resources, cheaper import costs and societal advancement)  the port will have not only to the Mozambican towns near Nsanje, but also to the greater Southern African economy of Malawi, Zambia and Zimbabwe, or even to Rwanda and Burundi.

Very few African countries geographically formed themselves into the shape they currently take. In fact only Liberia and Ethiopia were never colonised, but even their national polity formation had a lot to do with regional colonial activity around and about them. Thus, most decisions that determined the geographical shape of African countries were made by colonialists, a figment of history most Pan Africanists would rather forget. This to me means that it is shortsighted, regressive, a deficiency in intellect and a great fallacy (most often perpetuated by ignorance), for leaders of African countries today to be fighting against each other, or indeed dashing each others economic fortunes – when there is every chance that had colonialism never occurred (as we understand it), Africa could have ended up as a vast continent of undivided Kingdoms, each with access to the sea. Something that would have looked like this:

644px-Colonial_Africa_1913_Gold_Coast_map.svg
What Africa may have looked like if colonisation hadn’t occured. What Africa may look like in the future, hundreds of years from now

That is precisely why Uhuru Kenyatta must be applauded for the visionary Mombasa Nairobi railway link.

Similar Links:

Peter Mutharika attacks Malawi govt. for ignoring ‘Ndata’ University, Nsanje port in budget

MALAWI: Dream fades for inland port project

The Shire Zambezi Waterway Project is still a priority says Sadc secretariat [August 2013]

Malawi, Mozambique agree deal on Nsanje World inland port [April 2013]

Nsanje Inland Port Mw

Global disease

Some parts of the world look just the same. If you look closely, carefully – their going-ons look exactly the same.

Never mind what Matt Damon says here about the world, in which he says:

“… that the wrong people are in power. And the wrong people are out of power.That the wealth is distributed in this country and the world in such a way, as not simply to require a small reform, but to require a drastic reallocation of wealth…Now if you don’t think, if you just, listen to Tv and read scholarly things, you actually begin to think that things are not so bad…”

…if you look closely enough, some things seem to be slowly replicating themselves, over and over, across the globe. Indeed there is nothing new under the sun.

Take Gloria Arroyo (see short profile via BBC here) the former president of the Philippines, for example. While some of her supporters will inevitably counter that the case brought against her regarding diversion of disaster relief funds (see another here), and misusing lottery funds (~$8.8 million) – for which she was arrested – is in fact politically motivated, few will argue that such things don’t happen elsewhere.

In Haiti – a country 10,000 miles away from the Philippines, reconstruction officials and aid organisations have been accused of diverting millions of dollars (see another source here via New Internationalist) of reconstruction funds. In Japan, after the 2011 earthquake and resulting tsunami, US$2 billion was diverted, according to a Japanese Newspaper. Even authorities in the US have been accused of attempting to divert funds raised and donated for hurricane Katrina victims (see source here), and the U.S. Department of Housing and Urban Development has been sued over the matter.

In Malawi today, we have a president who, in my view, has a lot more in common with Gloria Arroyo, than with an ordinary Malawian woman from a village in Mulanje. (see a list detailing some of Gloria Arroyo’s government’s scandals here)

Joyce Banda has a whole string of gaffes behind her (either bad advice or she must learn to speak fewer silly things); Like Arroyo, Banda has been accused of diverting funds into private or personal projects (including using Independence Celebration funds for a PP party commemoration), and her food distribution exercises have been criticised, with some accusing her of attempting to ‘buy votes’ through distribution of maize and fertiliser. And just like Arroyo’s tenure had been, Banda’s government has been the subject of one political scandal after another. Like Arroyo, Banda has been accused of attempting to rig an election, and protecting corrupt colleagues from facing the hand of the law. Like Arroyo, her cash handouts have been criticised as wasteful, and calls of an audit as to the origins of the money she gives away at rallies have been heard far and wide within Malawi. Joyce Banda, like Arroyo has also been criticised for excessive travelling, and just like Arroyo, Joyce Banda has hired a PR company at great expense, to clean up her image, and that of her government.

And all that is even before you get to the ghost companies set up by civil servants – to embezzle funds, allegedly unexplained donations to the president’s foundation, and many other potential woes that can sit comfortably side by side with what the Philippines former president has been accused of.

But in the face of all that, including recently, a very public withdrawal of donor aid by Malawi’s donors – which minimally shows disapproval, Joyce Banda still maintains innocence.

Unlike Arroyo, who apologised (external link – YouTube Video) for speaking to an official of the electoral commission, Joyce Banda has not offered an apology to ordinary Malawians for the harm and devastation that has occurred under her government, especially in relation to the cashgate scandal.

It’s simply just incredible how similar the circumstances can be; the lessons so bountiful, yet political leaders (past and present) just don’t seem to learn.

Similar Links

How Joyce Mtila Banda Lost my 2014 vote

African Queens: the catty spats inflicting Africa’s first two female presidents

Tony Blair faces questions over Malawi scandal

Where is Africa’s manufacturing?

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I prefer to ask (and answer) the above question, that references to the ‘stage’ or ‘point’ (not physical location) when asked ‘Why is Africa not manufacturing?’ . I’ve been asked this question so many times, by people beffudled as to how Africa pretty much fails where everybody else has succeeded. The reason I prefer to answer the above question is because unlike popular belief Africa is in fact manufacturing, just not as much as everyone else, and just not always visibly (you don’t hear these stories on Tv, and they are rarely in the mainstream media publications – unless you read FT – although that’s arguably not mainstream)

Similar to the questions of manufacturing is that of whether the skills for the establishment of a bigger manufacturing sector are readily available for investors to tap into?

KiZerbo200

I’ll start with the bad news:- If the skills are available on the continent, then as things stand, they are in severe shortage and are not really of African origin. According to research from OECD [see BBC link here], by the end of this decade (emphasis required, that’s by 2020) 4 of every 10 young graduate is going to be either from India or China. Looking at the list of countries listed, not even a single one is an African country. What does that say? Well, a number of things; that we are not producing enough graduates, or that the number of African graduates with skill sets (and of a high calibre) who can compete with their contemporaries from Chinese and Indian universities is comparatively insignificant. Which is worrying, because it essentially means Africa’s manufacturing is nowhere, or only material if driven and held together by non-African effectors.

In the past the Education of Africans has received very little support from those who should know better. Most dictators who took over from the colonialists did too little to maintain the standard and level of Education (or Higher Education) across Africa, focussing instead of consolidating their rule. With a few exceptions, multiparty governments that came after dictatorships followed suit, by not investing anywhere near enough as was necessary. The donors that were bed-fellows with the dictators (and those that came after) arguably weren’t as sympathetic or visionary. According to an ESSA paper (quoted in this paper titled “THE ROLE OF HIGHER EDUCATION IN AFRICA” by Prof.Dr.Birgit Brock-Utne of the Institute for Educational Research at the University of Oslo) the World Bank once viewed Higher Education in Africa as a luxury:

“To meet minimally acceptable targets for coverage and quality of lower levels of education in most countries, as a general rule the tertiary sub sector’s share of stagnant real public education expenditures cannot expand further, and in some cases may have to contract. Some combination of efficiency improvements, increased private contribution to costs, and constrained growth of – in some countries and fields, outright cutback in – production of graduates must be sought.” (World Bank 1988: 95)

Expenditure on education was merely a self-serving budgetary exercise, and it didn’t matter what the result was, or whether indeed Africa would be ‘left-behind’ as a direct consequence of the under-investment, what mattered was only that money had been saved.

Without research into what their policy position currently is, I wouldn’t be able to tell you whether this view has changed or not.

Investors with the means have been to put it mildly, shy of investing on the continent let alone into skills development. A paper by a researcher named Paul Bennell which addresses the issue of whether structural adjustments programs ( these are those stringent rules imposed on African countries as part of loan agreements from the likes of IMF and World Bank) over a 15 year period have indeed achieved the desired response (i.e. increasing foreign investment in the hope of triggering technology transfer from the industrialized countries to Africa) paints a depressing picture. To quote Bennell (via this link):

Surprisingly, the share of net earnings from UK manufacturing investments in Africa remitted each year to the UK was higher than the global average between 1985 and 1990 . . . While UK companies have been keen to reinvest very sizable proportions of their profits in North America, Europe and Asia, investment opportunities in manufacturing have generally been very limited in Africa and thus, given the option, most parent companies would like to remit the bulk of subsidiary profits from the region

In other words, Africa was where you went to make your money, and not a place to reinvest your profits.

But it isn’t all bad news.

Recently, the African Development Bank’s (AfDB) approved a US$ 45 million grant for the creation of a Pan African University (PAU) that will consist of five Pan African Institutes focussing mainly on science, technology and innovation. The background to the story reads:

Africa has only 35 scientists and engineers per million inhabitants, compared with 168 for Brazil, 2,457 for Europe and 4,103 for the United States. Shortage of skills has been a major constraint to Africa’s progress in science, technology and innovation. Due to low investment in research and development, Africa ranks low in global competitiveness and productivity. African students tend to opt for economics, business, law and social sciences rather than science, engineering and technology, hampering the continent’s competitiveness and growth. The result is a mismatch between skills produced and private sector jobs.

While one would hope this initiative will be a success, and the Institutes will not falter under the common problems that beset universities and research institutions across much of Africa, it will be interesting to see how this develops.

As is well understood universally, innovation is the lifeblood of industry, and without the creation of ground-breaking and new products,  a country cannot advance or gain a competitive advantage. It was the case during the industrial revolution, during the rise of countries such as Germany, Russia, Japan and even Brazil. The exception (only to an extent) to this rule appears to be China, but that’s for a whole load of other reasons that distinguish it from the rest of mankind

But as the African Development Bank correctly observed above, in order to create ground-breaking innovations and products, and in order to influence global scientific research and technology, you need a skilled workforce. That’s why  the AfDB initiative represents a realignment of Africa’s potential in the right direction.

Across Africa, there are many success stories that are truly inspirational, although as i stated above, these are not shouted about in the mainstream media. One such inspirational story is that of Fabrinox, a south African company manufacturing sheet metal that was formed in 1993, and that has seen turnover in recent years hit US$5.8 million. Asked what had been the best decision he had made to grow his company, the company founder says:

To have followed the advice of my business mentor Johan Beyers to not restrict Fabrinox and its people to one geographical area, product or service, but to take a global view in running the business. For instance, it means that we think globally in terms of our supply chain, and are most willing to service clients beyond the boundaries of the Western Cape province in which we are located, and South Africa for that matter.

In addition to such success stories, there are also many partnerships between foreign manufacturers and agricultural producers across Africa, and some of those partnerships are genuinely beneficial to Africans. Who knows maybe some of these could one day pave way for an African manufacturing industry of its own, if some haven’t began to do so already? After all, manufacturing in industries such as motorcycle build and assembly in China began when after purchasing equipment from Japan, the Chinese assemblers began to modify the Japanese made components; fast forward a couple of decades, and China was making its own motorcycles which essentially were improvements (i.e. “innovations” more or less) of the original Japanese models.

The partnerships article above correctly points out that:

The level of mechanisation in African farming is still very low. Kenya had 25 tractors per 100 square kilometres of arable land in 2009 while Nigeria has almost seven, according to the most recent data from World Bank. That compares with an average of 271 machines in the US.

There are also some manufacturers who are looking towards Africa not because it’s ideal, but because they are getting sick and tired of the happenings in Asia (workplace safety that in recent years has become a major issue, levels of corruption, the increasing fees demanded by some factory owners, etc)

But before anybody gets too excited, look, the Chinese are planning on setting up shop in Africa! (see here and here). Although here one must wonder, does that mean Chinese labour (as they have been known to do in some African countries across the continent) or will these factories use African labour?

As for the power that will drive everything and get every bit of machinery working (in some countries – putting an end to years of intermittent blackouts), that’s about to get much more exciting. At least that’s what Obama seems to be saying.

Whodunnit : Kalambula bwalo

money-case-163495_640

“By making the government a combination of elected officials and citizen-backed initiatives and referenda, there can truly be a government of the people, by the people, and for the people.” Victoria Stoklasa, Sign It Into Law: How to Put Your Petition on the Ballot

Desperate times call for desperate measures, so the saying goes. Also, it takes a thief to catch a thief, so the idiom goes.

A scandal of rampant corruption on a colossal scale, dodgy deals that swindled millions of dollars from Malawi government state coffers, a mush of top-level fraud, pseudo-mafia syndicates, cover-ups, propaganda, damage limitation and possibly character assassination has been running amok on social media circles lately. The plot, which includes illegal cashing of cheques using ghost companies or companies that did not supply any goods or services to  the government, makes some astounding (but not entirely surprising) allegations and sounds like something out of a Nollywood movie. Or from a wild wild west film. You don’t believe me? Well, for a start take a look at these titles:

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And that’s before we even get to the issue of inflated invoices most recently decried here.

But, but before I continue (and before somebody erroneously labels me a cantankerous and belligerent git beguiled by rumour, speculation or social media chit-chat), I must categorically state that my interest in the story you are about to read is either as a messenger-cum-advocate (writing to advance and improve Malawi’s economic situation by dissemination of progressive ideas, views and inspiration – which probably includes exposing corruption that stands in the way of progress), or as a shocked Malawian national horrified by the scale and proliferation of impunity in government. At least that’s what I think.

I have absolutely no interest in petty fights or trifles, no interest in causing problems for anybody, neither interest nor intention in tarnishing individual reputations, I take absolutely no pleasure in defaming upright politicians or honest members of the public, and will take no responsibility whatsoever over the accuracy of what is handed over to me. I’m only reflecting what I’ve received and have been asked to publish, and should it be false, or not entirely true, I will do nothing other than publish one apology to those aggrieved by the allegations – here, on the same page as the allegation and, if they like, in BIG LETTERS and on a massive RED background, in a number of languages, for full effect:-

sorry

Obviously, anyone sensible never publishes serious allegations without doing some serious research and taking reasonable steps to invite comment or alternative storylines from those that stand accused of the allegations (as far as one is able to). And this I have done, although I must say after waiting for at least 9 days (during which I received no response or even acknowledgement) for the accused to comment, with what others term ‘righteous anger’ building in my loins, I had little choice but to proceed and publish this material.

Also, there is the element of common sense: which thief / conman who hasn’t yet been apprehended by the authorities or the law, and who has their liberty, will voluntarily confess of their thieving in public? That is why in legal circles evidence comes into play, because even if you deny doing it, if there is compelling evidence against you, beyond reasonable doubt, then you my friend are the one whodunnit.

But what if the evidence is fuzzy, or virtually non-existent (except for secret murmurs from fear-struck individuals who want to do what is right, but are afraid of the consequences)? And what if the conman happens to be cunning enough to cover up most (thankfully not all) of their tracks? Further, what if some of those accused are cagey about what happened (akin in opacity perhaps to the responses of US bank chiefs, when asked what they did with the bailout billions in re Troubled Assets Relief Program)? Also, consider the scenario whereby the ‘conmen’ are infact a sophisticated syndicate that includes powerful individuals within the Malawian government? Does the Malawian public still deserve to know of the allegations made against the public officials? I’ll let you think about that for a moment…

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So, after much soul-searching and indeterminate hours of painful research, telephone calls and discussions with legal types, hitting several dead ends and encountering various versions of the same story (an exercise that brought to mind the irreconcilable contradictions within the Biblical gospels), I have decided that the material I hold on the Mphwiyo shooting is plausible, of journalistic significance and squarely within the public right to know. After all, much of it is already on Facebook, and this will give those without a Facebook account a piece of the action.

Further (and please feel free to excuse any appearance of narcissism here), because well-known portals for aggrieved citizens to report the wrongdoings of their governments – such as Wikileaks – are often under siege/ attack (by, surprise surprise, government agencies) and burdened by other more spurious global matters (Edward Snowden affair, Julian Assange embassy hideout et al), it may not be too bad an idea to carry their mantle (in this regard that mantle is probably only a small scarf/handkerchief) a short distance, shedding light onto corruption that has been happening in recent months in more lowly places such as in the country of Malawi.

Thankfully, there are other warriors in this battle: The Chief Mourner is one, so is Billy Mayaya, Henry Kachaje and many other honourable and brave souls. I say Kudos to them all, no doubt, they have their own reasons and motivations, possibly agendas, definitely intentions for doing what they do, and you can ask them this, but I will not pretend that I know for sure what those intentions are, except to say that they wish the best for Malawi.

* * * * * * * * * * * * * * * * * * * The Background  * * * * * * * * * * * * * * * * * * *

While there has been both a positive (http://world.time.com/2013/09/15/malawi-official-who-fought-graft-shot-wounded/ ) and negative (http://www.nyasatimes.com/2013/09/18/smokes-and-mirrors-unpacking-the-paul-mphwiyo-saga/  ) picture painted of the budget director Paul Mphwiyo, who was recently shot outside his home, and according to news reports because he was close to exposing corruption in top government circles, a credible source reveals there is more meat to the story.

* * * * * * * * The Story – the allegations  – translated into English and with minor edits-  reference date: 17th of September 2013 * * * * * * * * *

Recently Paul Mphwiyo instructed his Budget Section to fund the Pensions Section with K450million (£ 842,239.46). Because Pensions is called Below-the-line account or in other words a Statutory Account (like miscellaneous deposit or the Presidency account) which means Auditors cannot question the Funds flow in these accounts since they are statutory, Mphwiyo took advantage of this loophole.

In a bid to either please or deceive the presidency, he was informing the Secretary to the Treasury that somehow the money will find itself in the hands of Peoples Party (PP) for their election Campaign. Mphwiyo shared the money with another gentleman; one Mr. Madzi (who apparently is the Chief Accountant in Accountant General’s office). This man was given K200million (£374,164.30) and he is the one who is keeping the ‘fund’ and distributing it amongst accomplice officers at the Accountant General’s office, while Paul Mphwiyo is keeping K250million (£ 467,688.20) to distribute with accomplices including officers at the Treasury. So this idea that Mphwiyo was fighting corruption is entirely false. It appears to be a carefully crafted lie designed to either cover up or distort the real truth.

Actually, for this issue to be uncovered there was a spat within the ‘corruption syndicate’ at the Accountant General’s office, as those involved began arguing as to how the funds will be divided amongst them, until Mr. Madzi suddenly took a holiday (‘bed leave’) the whole of last week. Predictably, some of the disgruntled officers began ‘talking’ threatening that they will out the accountant, including names of ghost pensioners they collectively used to make payments to, to embezzle the money out of government coffers.

My source tells me this is the third time that K450 million has been transferred from government accounts.  And interesting this is the third month that Government Ministries and Departments in Malawi have had only half of their budget funded. The excuse that was provided for the August transfer of K450 million was that there was the SADC Conference that needed to be funded.

And remember the K120 million which Patrick Sithole was arrested for several days ago? (http://www.nyasatimes.com/2013/09/11/malawi-public-servant-arrested-over-k120-million-cash/ ) Well, that’s related to this scandal because Patrick Sithole worked at Accountant General’s office in the reconciliation section. Here, he was responsible for accounting reconciliation on the books from all the government Ministries. He had access rights within the government accounting system known as IFMIS, which is used in all the Ministries. Because of having such access, temptation and excitement got the better of him and he began doing unauthorised deals and transactions. In order to get money out, he needed to find companies that were willing to receive money in seemingly ‘normal looking’ transactions, but from which he would be paid a cut, dividing the funds with the owner of the company. Unfortunately, he began to ask too many people to be accomplices in his fraudulent activities, and this exposed him as word travelled around as to what he was actually doing. With such rumours circulating, a man by the name of Pika Manondo (a man with connections to Ralph Kasambara – which Kasambara denies) approached Sithole, and gave him company names, so that they could be doing the fraudulent deals together. My source informs me that they have been embezzling governments funds for quite a while now and Pika Manondo (who was in fact fired from his role at Parliament because of fraud) has become incredibly wealthy such that he has K350million   (£ 654,982.14) in his bank account and owns a 15 vehicle car hire company. This wealth appears to have been accumulated from since the time Ralph Kasambara was appointed into government. So these deals extended to Ralph Kasambara and Wapona Kita (not least because some people knew that one day they will need legal protection).

These deals also involve companies belonging to Maxwell Namata (who was fired from Ministry of Housing due to fraud) [see different story implicating Namata’s company here: http://www.nyasatimes.com/2013/09/19/acb-arrests-2-public-servants-on-fraud-over-k70m/ ] and Mr Hophmally Makande’s protégés??

The Problem then arose about how they will be getting funds to fund Government Ministries which then can be used to process cheques to the Companies. That’s when Ralph Kasambara approached Paul Mphwiyo as Budget Director (because it is the budget section in the Ministry of Finance that does the funding in the IFMIS system) to help with the deals. Paul Mphwiyo is not at all a clean man, and it’s only a matter of time that these investigations reveal this very fact.

In actual fact, the Toyota Fortuner which was found at Patrick Sithole area 47 residence when he got arrested, and in which they found K80 million (£149,692.71), belongs to Paul Mphwiyo.

So, for a while these deals have been going on ‘smoothly’ but of recent, Pika Manondo, Ralph Kasambara, Hophmally Makande and Maxwell Namata (as owners of companies) were not happy with how the division of funds was going. And what happened was that A WEEK BEFORE Sithole was caught, armed thugs with guns raided Sithole’s house and stole K62million (£ 119,753.14). Some insiders say it was Max, Pika and Ralph who sent these thugs to Sithole’s house. The theft can be verified with LINGADZI POLICE STATION because Sithole is said to have reported the theft to police. This also explains why Wapona Kita rushed to defend Sithole. Which is why Ralph Kasambara was so concerned that he decided to go to Paul Mphwiyo and the Reserve Bank, as Government cheques are effectively cleared through Reserve Bank of Malawi using Commercial Banks as agents.

When Paul Mphwiyo heard this, there was an argument and he began threatening Pika, Maxwell Namata, Ralph and Hophmally that he would out them unless the thugs should return the money to Sithole. Mphwiyo said he didn’t care of the consequences because after all he was not the one who personally was affecting the fund in the IFMIS system; instead it was his junior officer.

This is where things went horribly wrong, there was anger against Mphwiyo, and one night the following days, Wapona Kita and Ralph Kasambara went to the house of Paul Mphwiyo to warn him that he could be killed because Maxwell Namata, Pika Manondo and the likes of Makande were not happy. This is what led to Mphwiyos shooting and people at the Ministry of Finance know this. In fact quite a good number would be willing to verify this information in confidence, if it wouldn’t threaten their jobs and lives.

As of 18th September 2013 Pika Manondo is in South Africa and Maxwell Namata was also in South Africa, but on a trip connected to China. However, some people believe a South African assassin has been hired to kill Mphwiyo, and his life is currently in danger.

*********************************The Response********************************

Ralph Kasambara and Wapona Kita have denied the allegations, and called them defamatory and malicious. They say these allegations come from people who wish them ill. In particular on Sithole’s K120 million case, Kita said while he is involved, it is not true that the instructions for him to represent Sithole in the case came from Kasambara as alleged. Further, Kasambara dismissed the allegations, saying  he has never been to the Budget Director’s office or his house, and Mphwiyo’s CCTV [which we can assume wasn’t tampered with] can prove this.

But it remains to be seen how true some of these allegations are, more so since Pika Manondo has now been put on Interpol’s wanted list. If the above story was entirely false, how has Manondo ended up on an Interpol wanted list?? :

manondo

[**** UPDATE -30 SEPTEMBER 2013MAXWELL NAMATA ARRESTED **** like above, if this story was entirely false, how has Namata been arrested in connection with these allegations?]

Some people are concerned that this may just be damage limitation and that Manondo the scapegoat may take the lashes which others duly deserve. However since police investigations are ongoing, this remains to be seen.

A different version of the story (with some similar allegations and naming similar characters)  appears here, on Maravi Post, titled “Marapost enquiry on malawi budget director shooting that triggered donor’s response-friday”. [Update 5th October 2013 – Theres another branch (one of many branches that show the workings of the syndicate) to the saga (now aptly named ‘Cashgate’) here. the K4.2 billion mentioned on this link is equivalent to £7,114,875.55 (Seven Million Pounds) – a hefty sum by any measure]

Whichever of the two versions is the most accurate or closer to the truth, donors are already calling for a swift probe into the matter, and have even offered help. In the interest of transparency and ‘clean hands’, president Joyce Banda would have been wise to take this opportunity to give donors unfettered access to all aspects of this case. Such an action would to an extent help restore public faith in the presidency

These are worrying developments that potentially risk Malawi’s stability, rule of law and reputation,” reads a statement signed by the British High Commissioner Michael Nevin, USA’s ambassador Jeanine Jackson, the head of the EU Delegation Alexander Baum, Germany Ambassador Peter Woeste, Iceland’s Maria Erla Marelsdottir, Ireland’s Liz HigginsJapanese Envoy Fujio Samukawa and Norwegian Mission Head Asbjorn Eidhammer.

As the drama was unfolding, president Joyce Banda (whose People’s Party (PP) is implicated by the allegations in that some of the money was allegedly meant for financing PP’s 2014 election campaign) was on another trip, this time in the US, in Austin, Texas where she even managed to find time to stop by a church, en route to giving an address at the 68th session UN General Assembly. The allegation against PP has a bit of a flavor of the troubles facing Afghan president Hamid Karzai, whose brother (more allegations here), is said to have embezzled US$1 billion from Kabul Bank (in which the brother is a minority shareholder). Part of the funds were said to be for financing Karzai’s re-election. Further, it is said Afghanistan loses 25% of its GDP to corruption, a curious percentage when we’ve just been informed by Malawi’s Anti-Corruption Bureau (ACB)’s director Justice Rezine Mzikamanda recently that Malawi loses 30% of budget money to corruption.

The question remains where exactly is that money going? And why are those responsible for the embezzlement not brought to book sooner than later?

Despite her assurances that her government is committed to combatting fraud, I wonder how this scandal will play out if indeed there were some people in her party who were in complicity with the swindlers, as the allegations seem to suggest. Will Joyce Banda sack them? How so, when the likes of Ken Kandodo or Khumbo Kachali, who themselves have also had some serious allegations made against them, got to keep their jobs? And if those officials get to keep their jobs, what will have become of one of the world’s most powerful black women, as she is fondly described in some quarters [see Forbes link here]? Word in the grapevine suggests that a cabinet reshuffle is imminent.

But since it’s doubtful whether any thief can voluntarily repent, and since in ages past people in positions of authority have been known to use their influence and power to cover-up wrongdoing (see the experiences in Kenya here and here), if what really happened in this scandal is not unfurled by independent parties unconnected with the wrongdoing, only time will tell whether these allegations hold water, or are in fact false. A complete fabrication. After all, it was only many years after Dr Kamuzu Banda lost power that the scale of misappropriation of public funds that occurred under his watch was revealed. Same story for aChair, same story with Bingu.

Madame President, some of us may have liked the way you began your presidency, but what’s happening now stinks! It stinks a lot. And believe me you, if you do not do what is right to clean up your government, your day of reckoning may be a lot more damaging than that which hit aChair, or what Bingu’s estate is currently going through.

God bless you all, God bless the Republic of Malawi.

***Update 30 September: Maxwell Namata Arrested ****

****** Update 2 October 2013 – Civil Society Organisations threatens to urge Malawians against tax payment: Gives JB 30 days ultimatum  ******

*** Anti Corruption Bureau Arrests man that got paid K1bn ($2.5 million) without having a contract ***

***Update 8th November : Pika Manondo Arrested ****

*****Update 9th November – Former Justice Minister Ralph Kasambara Arrested  via Voice of America *******

*****Update December 30 – Kandoje outsted as Malawi Accountant general over cashgate – redeployed *******

****Update 24th January 2014 – STRIPPING PRESIDENT **** NAKED, SEE HOW SHE STOLE YOUR MONEY MALAWIANS *****

****Update: 27th January 2014 – Former Malawi Justice Minister Ralph Kasambara re-arrested *******

***** Update 30th January 2014 – Pika Manondo Spits Fire, Says president Joyce Banda is shielding Big Fish in Cashgate *****