Government corruption "cripples" Malawi's health sector

LILONGWE, 24 October 2013 (IRIN) - Extensive looting of public funds by government officials in Malawi has dangerously undermined the country's public health sector, with hundreds of public health workers striking in recent weeks to protest late payments of their September salaries.

The delays were the result of a financial scandal involving government officials who exploited loopholes in a government payment system to make fraudulent deposits into the accounts of companies that did not have government contracts. Up to 20 billion kwacha (US$5.3 million) was siphoned from public funds, according to the Financial Intelligence Unit, a government organ.

The health worker strike, which started in early October, crippled operations at public hospitals, which are also experiencing depleted budgets for essential medical equipment and drugs.

"My three-year-old daughter had a fever, and I went to our district hospital to seek medical attention, but I came back without any. I found the staff at the hospital just lying around," said Laurine Mwangupili of Karonga District, in Malawi's Northern Region. "They told us that they could not attend to patients because they had not been paid their salaries."

A health worker at the hospital, who did not wish to be named, said all the facility's technical staff - including nurses, clinical officers and medical assistants - participated in the strike.

Workers at the country's two largest referral hospitals - Kamuzu Central Hospital in Lilongwe and Queen Elizabeth Central Hospital in Blantyre - and at Dedza and Salima district hospitals also went on strike after the salary delays. They said they would be willing to strike again if this month's salaries are delayed.

Striking workers who IRIN spoke to said that they had been threatened with eviction from their homes because they could not pay their rent. Some teachers also experienced delays in their September salaries as a result of the scandal.

"Crippled" because of corruption

Martha Kwataine, executive director of the NGO Malawi Health Equity Network, raised the alarm over the effect of corruption on the already underfunded health sector earlier this year.

"We have been saying that the health sector in this country is being crippled because of corruption," Kwataine told IRIN. "As a country, we cannot retain specialist medical personnel because we lose our money this way. As a result, we keep sending patients to countries like Tanzania to receive specialized treatment" for diseases like cancer.

She added that the issue of corruption went beyond the late payment of salaries, and that it was exacerbating shortages of essential medical supplies, including drugs, which are "currently lacking in a number of hospitals."

The Medical Doctors Union of Malawi also protested the looting in a statement, noting: "It is disheartening and utterly frustrating that while government is struggling to ensure constant availability of essential medicines and supplies in public hospitals, largely due to inadequate funds, some individuals within the same public service are finding it so easy to access the same inadequate funds for their own personal benefits."

In September, IRIN witnessed patients at Nkhata Bay District Hospital being served a thin porridge instead of the usual meals of 'nsima' (a thick maize-meal porridge) or rice. Hospital authorities said the change was a result of poor funding to the facility, which had worsened since August.

Donors react

The impacts of the high-level fraud, which local media are calling "Cashgate", are likely to be felt for months to come as international donors, who make up 40 percent of Malawi's national budget and are particularly important to the health sector, threaten to pull out of the country.

Norway has already suspended its aid, while Germany has urged the government to track down those responsible, and the European Union (EU) has threatened to withhold $39 million of aid in December unless the corruption allegations are dealt with. The International Monetary Fund (IMF) announced on Monday that it is withholding $20 million in extended credit facility to Malawi until December.

Since Malawi's Anti- Corruption Bureau uncovered the scam in early September, the government has shut down the payment system used to carry out the fraud, and 10 government officials have been arrested on charges of money laundering. On 10 October, President Joyce Banda dissolved her entire cabinet. Most of her 32-member cabinet was reappointed, with the exception of the ministers of finance, justice, and industry and trade.

History of corruption

Corruption has been a chronic problem in Malawi, with each of the country's previous presidents pledging to root it out only to be connected to corruption after leaving office.

The first president elected in multiparty polls in 1994, Bakili Muluzi, is currently answering charges of diverting 1.7 billion kwacha ($4.5 million) of donor money into his own pocket. His successor, Bingu wa Mutharika, has been posthumously accused of building a 61 billion kwacha ($163 million) estate during the eight years he ruled the country. Most of that money is suspected to have been looted from state coffers, as he declared just 136 million kwacha ($363,000) in assets when he assumed office in 2004.

Under Mutharika, Malawi also had an uneasy relationship with its donors. In 2011, the UK froze its aid to the country after a diplomatic spat.

Since assuming office in April 2012, Banda has worked hard to mend relations with donors, but these gains may now have been lost.

sm/ks/rz