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    EXPORT DEVELOPMENT FUND SENIOR OFFICERS RISK ARREST OVER ABUSE OF OFFICE

    Three officials at government-owned institution, Export Development Fund (EDF), have been reported to Anti Corruption Bureau for abuse of office.

    A concerned citizen has triggered ACB to look into the issue through a letter addressed to director, Martha Chizuma, and copied to Public Accounts Committee chairperson Shadreck Namalomba, Secretary to the President and Cabinet Zangazanga Chikhosi and Secretary to the Treasury Dr. MacDonald Mwale.

    EDF is a wholly owned subsidiary of the Reserve Bank of Malawi and was established to boost exports in the economy thereby attracting more forex.

    Details of the complaint to ACB are that Board Chairman, Neil Nyirongo, the Chief Executive Officer Gerald Nsomba, Company Secretary Agnes Sentala, and Tim De Borde, a member of the Board of Directors grossly abused office by bending procurement procedures and awarding themselves benefits of Export Development Fund (EDF).

    It is learnt that between September and December 2021, the three members of the Board and the Chief Executive Officer (CEO) hand-picked one Handsome M’bwana styled as Fletcher & Evance to provide auditing services in Malawi by conducting a forensic audit at EDF without following a competitive bid process as required by the EDF procurement procedures.

    This was a total contravention of the law because EDF is a public institution and follows the provisions of the Public Procurement Act as well as Public Finance Management Act. 

    Surprisingly, Fletcher & Evance is not registered as an audit firm in Malawi and also not licensed by the Regulator, Malawi Accountants Board (MAB).

    Further to this, the firm was only asked to conduct an audit only on selected transactions, instead of all the transactions EDF undertook during the review period from 2017 and 2020.

    Reserve Bank of Malawi: Where the rot started

    Despite being reprimanded by management regarding these irregularities, Fletcher and Evance was suspiciously paid the sum of K25 million, tax payers’ money, by the Fund as audit fees.

    In addition, between July 2020 to date two members of the Board of Directors of EDF, Neil Nyirongo, Board Chairman and Agnes Sentala, Board Secretary, have been taking unentitled fringe benefits, without even deducting income tax.

    This tax is supposed to come on the monthly benefits comprising airtime and fuel.

    This is contrary to the guidelines of benefits for the Board of Directors of EDF approved by the Annual General Meeting (AGM) of 2018, 2019 and 2020.

    According to the EDF conditions of service, only members of staff are entitled to such taxable fringe benefits.

    As per company law it is not acceptable for Agnes Sentala as a salaried employee of the Reserve Bank of Malawi to be taking fringe benefits from both the Reserve Bank and its subsidiary Export Development Fund.

    It is also learnt that a member of the Board of Directors, Tim De Borde, was also given a commercial contract to sell agricultural commodity on behalf of the EDF comprising sugar beans and white haricot beans when there were indigenous Malawians that submitted a bid at the same time to buy the commodity for export markets. Borde is said to have received K20 million as sales commission also without deducting income tax for grading and selling the commodity.

    In a related development EDF board has also been faulted by the Ombudsman for flouting rules in hiring Gerald Nsomba as CEO when he presented a post-graduate diploma instead of the required Master’s degree.

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