Nov. 21 (Bloomberg) -- Malawian President Joyce Banda said she’ll push ahead with rooting out corruption even if it spoils her chances of returning to office after elections in May.
Foreign donors including the International Monetary Fund and U.K. government have suspended aid that finances about 40 percent of the southern African nation’s budget after reports of rampant corruption and abuse of public funds. The scandal, dubbed “Cashgate” by local newspapers, led Banda to dissolve her cabinet on Oct. 10 and appoint international investigators to probe the allegations.
“This is my fight, this is our fight as a nation, as Malawians,” Banda said in an interview yesterday in Kuwait after attending an Arab-Africa summit. “We intend to implement it with or without donors because it’s our nation, our people that suffer as a result. This is a cancer.”
The corruption scandal and aid suspension threatens to derail an economic revival that has been underway since last year when Banda, 63, succeeded Bingu wa Mutharika, who died in office in April 2012.
The IMF said yesterday it delayed the disbursement of $20 million to Malawi “until the fiscal situation could be clarified and necessary corrective measures put in place.”
Economic growth will probably be curtailed to 5 percent this year from an earlier projection of 5.8 percent, while inflation is projected to average 28.5 percent, she said.
In May, Banda and her People’s Party will contest presidential, parliamentary and local government elections against Peter Mutharika’s main opposition Democratic Progressive Party, the United Democratic Front and the Malawi Congress Party.
“I have been told by my colleagues that I’m out of my mind to be tackling corruption six months before my elections,” Banda said. “But I have told them that I’m leaving it in their hands. If I don’t go back to State House because I was trying to do this, that’s fine. I’ve placed this before my political career.”
Banda said about 30 percent of the nation’s resources is being stolen through corruption. The Cashgate scandal has led authorities to arrest 68 people, open 18 court cases, freeze 33 bank accounts and appoint international investigators to conduct a forensic audit, she said.
“The fight against corruption has to continue,” Banda said. “So whoever takes over must continue this fight. If we don’t, Malawi shall remain where it is.”
Malawi is Africa’s top exporter of burley tobacco, a low-grade variety of the crop. Limbe Leaf Tobacco Co., a unit of U.S.-based Universal Corp., Alliance One International Inc. and Japan Tobacco Inc. are among buyers in the country. About half of the population of 15 million live on less than $1 a day, according to the IMF.
Malawi’s kwacha has slumped 18 percent against the dollar this year, making it the worst performing African currency after the Sudanese pound. It fell 1.5 percent to 410 per dollar as of 3:39 p.m. in Lilongwe, the capital.
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