They are building an airport city in Manchester

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Someone please remind me again why I live in this city

Most readers will probably not know that Manchester is quite an experimental city. The first free electric intercity metroshuttle buses in the UK began operating in Manchester. Manchester is set to have a 100MBps fibre optic network corridor interconnecting homes, businesses and universities along the famous Oxford Road. Manchester is home to one of a handful of Fablabs [small-scale workshop offering (personal) digital fabrication] across the world, complete with 3-D printers and such kit, an outfit that helps innovators seamlessly bring their ideas to life. Manchester is now home to Media City, the home of the BBC, a futuristic Media installation that is undeniably as state of the art as it gets. It was in Manchester that Graphene was first successfully isolated in 2004, at the University of Manchester, (and the scientists who discovered it won the Nobel Prize in Physics), and the invention (touted a ‘miracle material‘ and the next big thing) is set to transform technology in ways never imagined before. Beetham Tower, which is home to the Hilton hotel, restaurants and apartments was the tallest building in the UK outside London when it was completed in 2006, and is currently the tallest residential building in the UK. Manchester was the first city in the UK to get a modern light rail tram system when the Manchester Metrolink opened in 1992. Manchester will introduce a water taxi service between Manchester city centre and MediaCityUK at Salford Quays, the only one of its type in the UK. And now, they are building an Airport city, right next to the airport:

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If you want to do something new and fresh to your town and city, or if you want to push the boundaries, you should look to Manchester, because the chances are, if it’s not been done around here before, it’s either not worth doing, or is about to be done.

At this point I must state the obvious. Yes, you saw it coming, here it goes: Manchester is also home to two of football’s greatest clubs (and recently a National Football Museum), although we can probably argue about the ‘greatest’ bit forever, since curiously enough, despite my unashamed infatuation with this city, I happen to be an Arsenal fan :-).

Oh, and Manchester is the third-most visited city in the UK by foreign visitors, after London and Edinburgh.

But that’s not even half of what makes this city great…

As with most things, it didn’t just start yesterday. Anthony Burgess, Manchester born writer and composer (best known for  A Clockwork Orange), recalled in his autobiography published in 1986 how London “was an exercise in condescension. London was a day behind Manchester in the arts, in commercial cunning, in economic philosophy” For Burgess, Manchester was the real deal. And I think he had a point. This city, in the somewhat narrow frame of liberty in which its officials have been allowed to operate has been a pioneer for many years. During the industrial revolution, German writers and scientists came to Manchester, to observe first hand what these things called ‘factories’ were. With cotton mills springing up everywhere across Manchester, the city’s economy boomed, and created wealth for the industrialists. Manchester became the world first industrialised city, not least because of the textile factories and the Port of Manchester. During this time, it was dubbed ‘Cottonpolis’. Despite the city’s reliance on cotton, and the ‘pro-slavery spirit of America‘ which Sarah Redmond, a free African American Activist and Abolishionist talked about in 1859 when she visited to raise awareness about slavery, the pioneering spirit of Manchester soon had a welcome outcome: In 1862, Lancashire mill workers, at great personal sacrifice,took a principled stand by refusing to touch raw cotton picked by US slaves.

With the cotton industry on its knees, [President] Lincoln acknowledged the self-sacrifice of the ‘working men of Manchester’ in a letter he sent them in 1863. Lincoln’s words – later inscribed on the pedestal of his statue that can still be found in Lincoln Square, Manchester – praised the workers for their selfless act of “sublime Christian heroism, which has not been surpassed in any age or in any country.

P1050639The dynamism didn’t stop there, in 1821 the Manchester Guardian was founded.

It will zealously enforce the principles of civil and religious Liberty, it will warmly advocate the cause of Reform; it will endeavour to assist in the diffusion of just principles of Political Economy. – Prospectus outlining  the aims of the Guardian [Spartacus]

In 1878 the GPO (which became British Telecom, the telecommunications giant BT) provided its first telephones to a firm in Manchester. The world’s first stored program-computer was built in Manchester, at the Victoria University of Manchester by Frederic C. Williams, Tom Kilburn and Geoff Tootill, and ran its first program on 21 June 1948.

And it’s not just inventions and infrastructure that defined the city’s dynamism. Manchester has also been home to some great minds including the Chemist and Physicist John Dalton, Physicist J. J. Thompson, Engineer and Philanthropist Joseph Whitworth, and the Textile Merchant and philanthropist John Rylands.

Karl Marx and Friedrich Engels began to write the Communist Manifesto at Chetham Library (the oldest public library in the English-speaking world) in Manchester. As Luke Bainbridge of the Guardian puts it:

This is the home of the industrial revolution and the city that split the atom, the birthplace of the computer and the Guardian, the suffragette movement, the free trade movement, the co-operative movement, the anti-corn law league, vegetarianism, the nation’s first free library, the world’s first intercity railway and the engine room of rock’n’roll that has produced the country’s best bands of the past 30 years, from Joy Division to Take That. 

Basically, without Manchester, and a lot of its creativity, innovation and history, it’s quite likely that much of the world as we know it wouldn’t be where it is today. Certainly not in the shape that we know. We’d probably still be in the dark ages. Or worse. 😉

And that thought alone, whether you agree with it or think it is far-fetched, is enough reason to learn from what this city has achieved, and continues to achieve.

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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.

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Flipping the Corruption Myth

Flipping the Corruption Myth by Dr Jason Hickel, a lecturer at the London School of Economics and an adviser to /The Rules
– Corruption is by far not the main factor behind persisting poverty in the Global South.  Original article via Al Jazeera here

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Transparency International recently published their latest annual Corruption Perceptions Index (CPI), laid out in an eye-catching map of the world with the least corrupt nations coded in happy yellow and the most corrupt nations smeared in stigmatising red. The CPI defines corruption as “the misuse of public power for private benefit”, and draws its data from 12 different institutions including the World Bank, Freedom House, and the World Economic Forum.

When I first saw this map I was struck by the fact that most of the yellow areas happen to be rich Western countries, including the United States and the United Kingdom, whereas red covers almost the entirety of the global South, with countries like South Sudan, Afghanistan, and Somalia daubed especially dark.

This geographical division fits squarely with mainstream views, which see corruption as the scourge of the developing world (cue cliche images of dictators in Africa and bribery in India). But is this storyline accurate?

Many international development organisations hold that persistent poverty in the Global South is caused largely by corruption among local public officials. In 2003 these concerns led to the United Nations Convention against Corruption, which asserts that, while corruption exists in all countries, this “evil phenomenon” is “most destructive” in the global South, where it is a “key element in economic underperformance and a major obstacle to poverty alleviation and development”.

There’s only one problem with this theory: It’s just not true.

Corruption, superpower style

According to the World Bank, corruption in the form of bribery and theft by government officials, the main target of the UN Convention, costs developing countries between $20bn and $40bn each year. That’s a lot of money. But it’s an extremely small proportion – only about 3 percent – of the total illicit flows that leak out of public coffers. Tax avoidance, on the other hand, accounts for more than $900bn each year, money that multinational corporations steal from developing countries through practices such as trade mispricing.

This enormous outflow of wealth is facilitated by a shadowy financial system that includes tax havens, paper companies, anonymous accounts, and fake foundations, with the City of London at the very heart of it. Over 30 percent of global foreign direct investment is booked through tax havens, which now collectively hide one-sixth of the world’s total private wealth.

This is a massive – indeed, fundamental – cause of poverty in the developing world, yet it does not register in the mainstream definition of corruption, absent from the UN Convention, and rarely, if ever, appears on the agenda of international development organisations.

With the City of London at the centre of the global tax haven web, how does the UK end up with a clean CPI?

The question is all the more baffling given that the city is immune from many of the nation’s democratic laws and free of all parliamentary oversight. As a result of this special status, London has maintained a number of quaint plutocratic traditions. Take its electoral process, for instance: More than 70 percent of the votes cast during council elections are cast not by residents, but by corporations – mostly banks and financial firms. And the bigger the corporation, the more votes they get, with the largest firms getting 79 votes each. This takes US-style corporate personhood to another level.

To be fair, this kind of corruption is not entirely out-of-place in a country where a feudalistic royal family owns 120,000 hectares of the nation’s land and sucks up around £40m ($65.7m) of public funds each year. Then there’s the parliament, where the House of Lords is filled not by-election but by appointment, with 92 seats inherited by aristocratic families, 26 set aside for the leaders of the country’s largest religious sect, and dozens of others divvied up for sale to multi-millionaires.

Corruption in US is only slightly less blatant. Whereas congressional seats are not yet available for outright purchase, the Citizens United vs FEC ruling allows corporations to spend unlimited amounts of money on political campaigns to ensure that their preferred candidates get elected, a practice justified under the Orwellian banner of “free speech”.

The poverty factor

The UN Convention is correct to say that poverty in developing countries is caused by corruption. But the corruption we ought to be most concerned about has its root in the countries that are coloured yellow on the CPI map, not red.

The tax haven system is not the only culprit. We know that the global financial crisis of 2008 was precipitated by systemic corruption among public officials in the US who were intimately tied to the interests of Wall Street firms. In addition to shifting trillions of dollars from public coffers into private pockets through bailouts, the crisis wiped out a huge chunk of the global economy and had a devastating effect on developing countries when demand for exports dried up, causing massive waves of unemployment.

A similar story can be told about the Libor scandal in the UK, when major London banks colluded to rig interest rates so as to suck around $100bn of free money from people even well beyond Britain’s shores. How could either of these scandals be defined as anything but the misuse of public power for private benefit? The global reach of this kind of corruption makes petty bribery and theft in the developing world seem parochial by comparison.

But this is just the tip of the iceberg. If we really want to understand how corruption drives poverty in developing countries, we need to start by looking at the institutions that control the global economy, such as the IMF, the World Bank and the World Trade Organisation.

During the 1980s and 1990s, the policies that these institutions foisted on the Global South, following the Washington Consensus, caused per capita income growth rates to collapse by almost 50 percent. Economist Robert Pollin has estimated that during this period developing countries lost around $480bn per year in potential GDP. It would be difficult to overstate the human devastation that these numbers represent. Yet Western corporations have benefitted tremendously from this process, gaining access to new markets, cheaper labour and raw materials, and fresh avenues for capital flight.

These international institutions masquerade as mechanisms for public governance, but they are deeply anti-democratic; this is why they can get away with imposing policies that so directly violate public interest. Voting power in the IMF and World Bank is apportioned so that developing countries – the vast majority of the world’s population – together hold less than 50 percent of the vote, while the US Treasury wields de facto veto power. The leaders of these institutions are not elected, but appointed by the US and Europe, with not a few military bosses and Wall Street executives among them.

Joseph Stiglitz, former chief economist of the World Bank, has publicly denounced these institutions as among the least transparent he has ever encountered. They also suffer from a shocking lack of accountability, as they enjoy special “sovereign immunity” status that protects them against public lawsuit when their policies fail, regardless of how much harm they cause.

Shifting the blame

If these patterns of governance were true of any given nation in the global South, the West would cry corruption. Yet such corruption is normalised in the command centres of the global economy, perpetuating poverty in the developing world while Transparency International directs our attention elsewhere.

Even if we do decide to focus on localised corruption in developing countries, we have to accept that it does not exist in a geopolitical vacuum. Many of history’s most famous dictators – like Augusto Pinochet, Mobutu Sese Seko, and Hosni Mubarak – were supported by a steady flow of Western aid. Today, not a few of the world’s most corrupt regimes have been installed or bolstered by the US, among them Afghanistan, South Sudan, and the warlords of Somalia – three of the darkest states on the CPI map.

This raises an interesting question: Which is more corrupt, the petty dictatorship or the superpower that installs it? Unfortunately, the UN Convention conveniently ignores these dynamics, and the CPI map leads us to believe, incorrectly, that each country’s corruption is neatly bounded by national borders.

Corruption is a major driver of poverty, to be sure. But if we are to be serious about tackling this problem, the CPI map will not be much help. The biggest cause of poverty in developing countries is not localised bribery and theft, but the corruption that is endemic to the global governance system, the tax haven network, and the banking sectors of New York and London. It’s time to flip the corruption myth on its head and start demanding transparency where it counts.

Dr Jason Hickel lectures at the London School of Economics and serves as an adviser to /The Rules. 

Follow him on Twitter: @jasonhickel

IFMIS : What did UDF, DPP and PP know?

IFMIS

Reports can be fantastic pieces of literature. Absolutely wonderful things…informative, revealing, ridiculing, attesting – marvelous!  More so if they happen to be government-funded.

Whenever political leaders are busy paying lip service, telling lies, denying allegations and generally being unpleasant to their electors (and those who didn’t elect them), a little bit of research can quickly reveal who amongst the herd is Pinocchio.

The report above which is a summary can be downloaded here: Summary of key findings and recommendations of GOM IFMIS Review-2. It is dated 18th November 2009, and is a summary of a Report commissioned to asses how the IFMIS was functioning. It is titled QUICK ASSESSMENT OF THE INTEGRATED FINANCIAL MANAGEMENT INFORMATION SYSTEM.

The original report (which I imagine can be obtained from the Public Financial and Economic Management section of the Ministry of Finance) is over 200 pages long (and don’t ask how I got my hands on it), but this summary is only 34 pages long. According to this summary:

As part of the continuous PFM reform processes in a bid to further enhance public expenditure management, the Malawi Government through the PSRMU of the OPC engaged the author through UltiNetS2 to undertake a quick impact assessment of the EPICOR* based IFMIS implementation with a core objective to identify any system operational or functionality challenges and make appropriate recommendations for improvements.

*EPICOR is the company that makes such software

In other words the report was commissioned to highlight the benefits and challenges of the IFMIS and ask questions such as:

(1) What is the IFMIS?

(2) Why was it chosen by the Ministry of Finance (MOF)?

(3) Is it working as intended / achieving its purpose?

(4) How well is it performing ?

(5) What are the problems / operational issues ?

(6) Where are these problems / operational challenges?

(7) What can be done to improve its performance/ resolve these problems?

… and so on.

At the time of commissioning, Bingu Wa Mutharika had been in power for some 5 years and 6 months.

Before we look closely at this summary, a notable point is somewhat appropriate: the version of IFMIS Malawi installed on its systems / computers is based on a version Tanzania installed. We all know that not too long ago, Tanzania’s president sacked his cabinet ministers due to corruption. Was this related to IFMIS?? I think someone needs to find out?

Earlier in 2006, the OECD Journal on Budgeting carried an article by Jack Diamond and Pokar Khemani titled Introducing Financial Management Information Systems in Developing Countries that explored the merits of the IFMIS system and looked at case studies in developing countries including those across Africa.

According to the OECD article, attributes of a well-designed FMIS include:

attributes-ifmis

Yet if you take a look at the summary of the IFMIS in Malawi, it’s indisputable how hollow and a shambles the whole rollout was. Everything was dysfunctional, from the contracting phase to the implementation phase and support, everything was a disaster!

According to the UltiNetS Summary, the positives include:

– The successful implementation of the EPICOR based IFMIS significantly contributed to the debt cancellation for Malawi as a country under the HIPC initiative

The implementation of EPICOR based IFMIS has to some extent assisted the Government in restoring some fiscal discipline through public expenditure management particularly on transactions that are primarily processed through the system.

The introduction of EPICOR based IFMIS has significantly checked the proliferation of Government bank accounts by the MDAs* thereby giving the AGD* a better control.

The introduction of the EPICOR based CPS* has significantly restored the credibility of Government cheque payments to its creditors.

*[AGD: Accounts General Department; CPS: Central Payment System; MDA’s: Ministerial Departments and Agencies]

Yet in spite of all this, we are then informed that:

– The conditions of contract were more in favour of the contractor (Soft-Tech Consultants) than the client (Malawi Government) which clearly shows that the client did not have much input into the document before engagement.

There was no valid justification for the training to be conducted for almost the whole year and at every site of implementation, hence proved too expensive for the Government considering similar implementations.

– The IFMIS contractual costs are too high than anticipated (almost USD $1.7million) more particularly on the user licences, consultancy, training services and travel which account for almost 91% of the total cost.

– There was non strategic procurement of bout 240 system concurrent user licences for all 32 sites for all the modules when only a few of these licences are currently used.

–  The EPICOR based IFMIS architecture, design and operational framework is incomplete to constitute an ideal Government IFMIS system design and operational architecture as it still falls short of
other key elements and full functionality of the sy stem.

In other words, the Malawian government has been using an incomplete and system that is not fit for purpose. The observations continue:

There is a great deal of system underutilization considering the number of procured modules and other key features within the existing functional modules that are currently not functional.

The system does not have any alert system to detect any fraudulent activities or any deviations to normal operations within the system such as overriding system controls without appropriate approval
process and any system performance issues let alone a functional audit trail to track system usage

If post-Cashgate you wanted to know why junior accounts assistants (see most recent revelations here) were found with millions of dollars, this is precisely why.

The current Chart of Accounts is not yet fully GFS compliant as per the IMF requirement and does not fully respond to the performance measurement indicators of the current MGDS.

From a budget execution perspective, the EPICOR based IFMIS system is working perfectly as a budget expenditure control system since no funding or expenditure can take place where there is no budget unless overridden, however the system does not block budgets that have already been expended to the equivalent of expenditures 

In other words, a user can Overspend. In principle, this means that a user can generate a cheque and get the Reserve Bank of Malawi to honour it, even when on his budget, that money doesn’t actually exist.

The IFMIS infrastructure does not have any intrusion prevention and detective system or mechanism to easily gain visibility and monitor any potential security threats considering that the access in mainly by user ID and password which can easily be accessed

So who can say whether foreign criminals haven’t laid their hands on some of this money??

Some of key control features particularly in the payment management approval process within the IFMIS are not yet activated and functional to improve the entire system internal control framework.

The current payments management system is weak and prone to exploitation or abuse by colluders as access into the system and Accounts Payable module in particular is not physically authenticated beyond normal user ID and passwords due to lack of appropriate tools.

Again, like above, misappropriation withing IFMIS is easy, so long as you have a username and password. And people could collude to steal money, so the Cashgate scandal should not be a surprise at all.

The current core accounting system and financials suite of the EPICOR based IFMIS has an Electronic Funds Transfer (EFT) module which is more secure mode of payments which if implemented could help reduce some instances of cheque frauds and frequent delays in processing and dispatching cheques. In addition, it could eliminate risks associated with the MALSWITCH link used for cheque list transmission.

So they knew that there was cheque fraud happening? Or is this just a hypothetical situation?

The current structure of the CPS within the EPICOR based IFMIS lack appropriate tools and effective controls for checking, verifying and authenticating or validating payment transactions within key units before issuing cheques or effecting transfers to third parties, hence difficult to detect any fraudulent payments from within the financial system. For instance the Receiving unit of the AGD’s CPO does not have any means for verifying the authenticity of signatures on the payment vouchers and electronic voucher list from the MDAs, hence difficult to establish any instances of forgery.

There was no capacity to check if signatures are fake, meaning forgeries could have occurred, or did occur?

– The NAO [National Audit Office] does not have adequate capacity to audit the EPICOR based IFMIS functionality apart from auditing the financial statements (‘ Appropriation accounts’) as it does not have automated audit management tools to enable carry out that function

The NAO does not have adequate capacity in terms of man power and funding to effectively carry various types of audits covering automated systems.

All this advice was given to the Office of the President under DPP’s watch, when Mutharika was at the helm. Further the 2006 OECD report at page 19 / 115(last paragraph), states that:

In general, the implementation phase has not progressed well, primarily because of clearly limited involvement and some neglect of the system by the main players, including the Ministry of Finance, the Accountant General and pilot ministries. There are several significant issues to be addressed before the system can be made fully functional and rolled out.

Neglect?? That’s a strong word. When they received this advice, why didn’t DPP act?  And if they claim to have acted, what did they do to solve the above problems? More importantly, when PP came into power, did they know of this report and its findings, given the fact that the Ministry of Finance is a crucial ministry in any country?

I think the Malawian people deserve some answers. Malawians need responsible leaders who will help develop the country, not a hopeless and clueless bunch who are only interested in self-enrichment…

Reviewing this summary, it is absolutely clear that the Ministry of Finance knew the dangers of the IFMIS and the fraud that was happening ? They must have known. There are no two ways about this. But they ignored the problems/ fraud, or took advantage of them. In my view, the silence / inaction suggests some people was benefitting from the mess. Clearly, Lipenga and his juniors were hopelessly incompetent, and Joyce Banda must take responsibility for bringing in such a useless man into such a respectable office.

It all simply begs the question, how can such massive amounts of money be embezzled when the inherent problems were known? Those responsible for the plunder must pay back what they stole…Every single penny! And face the arm of the law.

The fact that successive governments knew there was a problem, but didn’t act strongly suggest there was a conspiracy to defraud the Malawian people, such that our syndicate theory may in fact be broader and far-reaching than us ordinary folk think?

Why do Malawians elect incompetent officials who can’t even do the basics?

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Visa facilitation as a means to support tourism growth, socio-economic development and job creation

joycebanda

Yesterday an update appeared on the Malawian president’s Facebook page, in which she informed her social media followers that she had participated in a ‘.. Ministerial Roundtable of the United Nations World Tourism Organisation at Victoria Falls’. The topic for discussion at the forum was ‘visa facilitation as a means to support tourism growth, socio-economic development and job creation’.

Considering that the themes of infrastructure, airports and increased cross-national trade within Africa have popped up several times in discussions and articles on this website (for example here, here and here), I think her angle on the issue is commendable, and deserves a mention.

Recently, the Sudanese Billionaire, Mo Ibrahim expressed his displeasure during his address at the 11th Nelson Mandela lecture, with the visa regimes in Africa, saying:

“..The second issue is African economic integration. Only 11% of our trade is amongst the Africans. We refuse to let our people travel from one country to another. We always need a visa. And l also say, sadly, although being Sudanese, whenever l travel in Africa l always carry a British passport, because l am welcome.

My colleague here, a Member of our Board, had huge trouble in getting a visa to be able to join me here. He was a Secretary General of the United Nations, a board member, just to get a visa here is a major trouble. But with my British passport l am welcome here through your immigration lines. Is that acceptable?..”

One can only hope that these kinds of initiatives — which clearly will have a tangible economic benefit to Africa – do eventually get implemented by the countries concerned, and do not end up onto the large pile of broken promises by political leaders past and present.

The full update on the Facebook page is as follows:

Good evening my friends

Today I attended a Ministerial Roundtable of the United Nations World Tourism Organisation at Victoria Falls, on the border of Zimbabwe and Zambia where I addressed participants on the topic: ‘visa facilitation as a means to support tourism growth, socio-economic development and job creation’.

I addressed participants that our continent possesses many places of great beauty and I went on to talk about our beautiful country, Malawi, which happens to be one of the most beautiful countries for tourists attraction as we are blessed with a large freshwater lake, surrounded by white sands and full of a diversity of fish species and country boasts of wide open skies, beautiful rolling hills and mountains that offer rare experiences to climbers, bird watchers and adventure enthusiasts.

I made it clear that Malawi’s description as the ‘warm heart of Africa’ does not just refer to our inviting climate or the deep red of our sunset. It aptly describes the welcome you will receive from all Malawians as we are indeed very friendly and “warm hearted people of Africa”!

While talking about tourism I addressed participants that , tourism promises immense opportunities for growth of our economies and job creation; however millions of people continue to face unnecessary barriers to travel. These barriers include complicated and expensive visa processes; difficult and therefore expensive transport connections, lack of integrated border management systems and security threats.

For example, according to research by the United Nations WorldTourism Organisation; and World Travel and Tourism Council, facilitating visas among the G20 countries alone would create an additional five million jobs by 2015. This is a clear indication of the impact simplified and user friendly visa system can have on our economies.

It is my view that Visa Facilitation has the potential to enhance regional integration, intra-regional trade and easy movement of capital and people between countries and regions.Therefore, visa policies and procedures are among some of the most important instruments influencing tourism and investment. The development of policies and procedures for visas as well as other travel documents is closely linked to the development of tourism. Furthermore, the quality, reliability and functionality of visas have a direct correlation to number of arrivals at a destination.

In lieu of the above reasons I am calling for regional interconnectivity amongst our nations which may entail improving the current state of transport and telecommunications infrastructure and facilitating institutional improvements to optimise the efficiency and capacity of road, rail, water and air transport and the social sectors in education and health.

I believe that this in turn has high potential on enhancing economic growth; thus contributing to overall objective of poverty reduction. The link between tourism and poverty reduction is well known as one of the fundamental contributions is job creation which is part of our government’s economic recovery plan that my government is pursuing.

Thank you all for your support and prayers

May God bless you!

Good night!

Dr Joyce Banda
President
Republic of Malawi “