Oct. 21 (Bloomberg) -- Malawi plans to establish a court specializing in corruption cases, as the southern African nation grapples with allegations of massive diversion of government money, Vice President Khumbo Kachali said.
Corruption wastes as much as 30 percent of government spending each year, Kachali told lawmakers in the capital, Lilongwe, in an address broadcast live on MBC Radio. Authorities are auditing transactions dating back to 2005 with U.K. assistance, and the government has frozen the bank accounts of several companies and individuals, Kachali said.
President Joyce Banda is struggling to assuage donor and public demands for a crackdown on corruption, amid allegations dubbed “cash-gate” by local media. Banda dismissed her cabinet on Oct. 10, and set up a special unit of police and government officials to examine public finances.
Malawi is Africa’s top exporter of burley tobacco, and Limbe Leaf Tobacco Co., a unit of U.S.-based Universal Corp., Alliance One International Inc. and Japan Tobacco Inc. are among buyers. About half of the population of 15 million live on less than $1 a day, according to the International Monetary Fund.
Kachali didn’t comment on allegations by some legislators that he himself was involved in the scandal. The speaker of parliament, Henry Chimunthu Banda, has assured legislators that they’ll be given a chance to interrogate the vice president over the allegations.
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