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Blantyre, Malawi - Malawi Vice President Khumbo Kachali on Monday blamed the looting of government coffers on “loopholes” in the state's payment system and vowed to punish culprits.
“The government will bring to book any person implicated in fraud and corruption and we will not shield anyone,” he told parliament.
President Joyce Banda dissolved her entire cabinet on October 10 over a graft scandal that involved top government officials.
Ten government employees have been arrested in recent weeks on suspicion of swindling more than $3 million (2.2 million euros) from state coffers, in a scandal dubbed the Capital Hill cash-gate after the seat of government.
Banda later reinstated nearly all of her cabinet but fired four members, among them the minster of finance.
Kachali said “loopholes” in the state's payment system have seen public servants “siphoning huge sums of money using private companies with no contracts with government”.
A forensic audit into fraud and corruption which is underway will date back to 2006, when the late president Bingu wa Mutharika was in his first term, he said.
A “number of firms who were beneficiaries of fraud and corruption have had their bank accounts frozen”, Kachali added.
Some lawmakers had earlier tried to block Kachali from addressing parliament on the issue, claiming he was also implicated in the fraud.
Since the scandal emerged the European Union has threatened to suspend aid and Norway has halted funds, calling on the president to swiftly deal with rampant corruption.
Malawi relies on foreign aid to bankroll around 40 percent of its national budget. It is estimated that up to 30 percent of state revenue is lost to corruption every year.