Feature
Business/Economics

By Frazer Potani, Lilongwe, Malawi

He was a stout and energetic man. But to the surprise of many, he was captured crying, yes! Tears freely trickling down from his eyes like a little wailing baby on its mother’s lap.

The man was weeping like a child after armed robbers ambushed him and went away with over K3 million (over $10,000) hard cash in broad day light near Zubeda in Limbe Malawi’s sole commercial city, Blantyre.

The unidentified Asian Businessman met his fate around 4.30 p.m. when there was a long queue of vehicles from Limbe going to Blantyre. The victim’s car, a black Ford pickup 4 by 4 was among the cars on the long queue.

The robbery took place this year in a 007 James Bond like film scene, since in a lightening like speed, five masked men carrying AK47 guns surrounded the trader’s vehicle, knocked on his window and opened the door.

The thugs then snatched the keys and told him to surrender the cash. The victim could not move his car as the robbers fled with his car keys. All this happened as people watched fully hence the businessman just stood by the car while crying bitterly.

The trader became a victim in a long list of Asian traders who were being targeted by robbers since Joyce Banda became Malawi’s President in April following the death of Bingu wa Mutharika.

In fact over 123 businessmen of Asian origin according to police reports are said to have been robbed of millions of Kwachas.

“We are still investigating the whole matter [the robbery on the Asian businessman],” said Limbe Police Spokesperson Chifundo Chibwezo then.
Similarly, the time was also 7 O’clock evening on a Sunday as Mc Knight Mkunda, a Financial Controller for a Lilongwe Sales and Marketing firm was behind the wheel of his company’s sea green Isuzu 4 by 4 Japanese model double cabin pick up.

He then bit his lower lip cruising along the Lilongwe-Blantyre M1 Road to attend a vital meeting the following Monday at one of the prominent hotels in Blantyre.

Unexpectedly, upon reaching near Mlangeni in Ntcheu on the Malawi-Mozambique border, four armed robbers ambushed him by stopping him and without delay snatching the vehicle, leaving him stranded.

The thugs then drove the vehicle away and took uncharted routes into Mozambique where, without difficulties sold the pickup within just few days and shared the proceeds from their loot before planning again to return to Malawi to ambush another motorist.

The Asian businessman and Mkunda are just some of the many victims of well organized crime including armed robberies in Malawi, as well as East and Southern Africa which are putting lives including of investors and their businesses and property in danger.

In Malawi, authorities said they are clueless of who are behind the crime explosion against people in general including businessmen and their property.
Malawi’s Home Affairs Minister Uladi Mussa, however, admitted that combating crime remains one of the country’s challenges faced by government..

“Dealing with crime is indeed a challenge that we have to as government deal with to create Malawi a safe environment to stay and conduct business,” he said.

Mussa disclosed that one contributing factor to Malawi’s on-going struggle to deal with crime hikes is that policemen in the country are few as their ratio is 1 to over 1,300 against the recommended global ratio of 1 to 500.

But he was quick to add that Malawi Government is leaving no stone unturned to curb crime to protect people and their property including attract investors to do business in the country by among other things intensifying recruitment of more policemen for deployment in the country.

According to local media reports Malawians were robbed of over K91 million(over $300, 000), over 67 murdered and raped during robberies within just the first 100 days of Joyce Banda’s rule alone.

Before his transfer from Police Headquarters in Lilongwe where he worked as Malawi Police Service (MPS) National Police Spokesperson to Zomba to work as Zomba Police Station Deputy Police-In-Charge, Davie Chingwalu, however, said crime rate had decreased significantly in the country.

“According to an analysis of crime rate statistics of the period from January to June 2012 shows that we have registered 32, 883 cases throughout the country. When compared to the same period in 2011, we have an 18 percent decrease because in 2011 we registered 40, 202 cases,” he explained.

Nevertheless, Chingwalu was also quick to concede that an increase was recorded in murder cases and robberies as well as housebreaking offences in Malawi’s cities after the shoot-to-kill policy introduced by late president Bingu wa Mutharika’s administration was abandoned by President Joyce Banda’s Government.

President Banda herself admitted that since coming into power her government was struggling to extinguish rampant fires of criminal activities in Malawi.

“The criminal activities are threatening potential investment opportunities for Malawi as well as private sector development efforts to contribute to the country’s economic growth to help us eradicate poverty,” she explained.

Banda emphasized that as a country Malawi needs to, at all cost do everything to attract more investors to do business in the country to spur social-economic growth.

“Attracting more investors to do business in the country will mean creating jobs and initiating economic growth to eradicate poverty because the private sector is the engine room of economic development and only if we create a safe environment for investors and their property it will be difficult to attract investment from elsewhere to spur economic growth,” said the President.

She therefore, appealed to all stakeholders including policemen, local leaders and the general public to join hands in the fight against crime in Malawi.

“I am very glad that some collaborative efforts by some members of the general public and chiefs with the police have led to a commendable job whereby some hardcore criminals have been apprehended by police in of the country,” said Banda.

She was however, also quick to express her disappointment over the tendency of some local leaders, policemen including members of the general public of protecting criminals including illegal immigrants who were posing threat to the country’s security at all levels.

At regional level according to the Cape Town, South Africa based Institute for Security Studies (ISS) investigation report titled ‘Money laundering in East and Southern Africa’ commissioned by the Norwegian Agency for Development Cooperation (NORAD) there is a good crime network in East and Southern Africa.

Due to the crime net work’s strength, while leaders at all levels in the region have routinely been holding summits, where they ate, exchanged wine glasses, while tackling various strategies including signing of agreements aiming at enhancing free trade, economic growth, regional integration, poverty eradication to bail out their citizens from poverty to prosperity, by then organized criminal groups had already succeeded in creating their own free trade zones for their illicit commerce!

“There are very clear relationships and interlinking factors between crime syndicates operating in southern Africa. It is not a secret to law-enforcement agencies in the region that the criminals in the region have better cooperation links than the police officers do,” explained then Frank Msutu head of the Sub-Regional Bureau for International Police (Interpol) for southern Africa in Harare, Zimbabwe.

He disclosed that to generate income for their businesses criminals throughout the region among other things used stolen vehicles including illegal firearms as well as indulge in money laundering as their currency bases for other illicit goods such as narcotis.

An investigation by ISS backs Msutu revealing that one survey indicated that a total of 100, 647 motor vehicles and motorcycles (275 per day) were reported stolen in South Africa and another had police recording 14, 999 (41 per day) cases of motor vehicle high-jacking and an overall 115, 646 (316 per day) were channeled from legitimate ownership into the criminal market in South Africa alone.

“The [South African Police Service (SAPS)] estimate that close to 50 percent of the vehicles reported stolen or high-jacked are smuggled across South Africa’s borders to Southern African countries [including Malawi] and beyond,” reads the study in part.

The document however, further indicates that not all vehicles reported stolen or high-jacked in southern Africa were genuine because investigations also uncovered that some vehicle owners also falsely reported that their vehicles had been high-jacked or stolen for the sake of milking money from their insurance agents through claims.

“For example, the Tanzanian Police complained that they are holding hundreds of vehicles reported stolen in South Africa but find some of the original South African owners reluctant to recover them. Tanzanian Police Investigations have shown that some of the original owners had sold their vehicles and then reported them stolen in order to collect [claims] from their insurance companies,” reads the report.

ISS investigator Charles Goredema disclosed that his organization conducted an investigation in East and Southern Africa which had indeed revealed that criminal activities were rampant.

He explained that the investigation uncovered that money laundering is even of strategic importance to organized crime generally, and corruption in particular in the East and Southern African Anti-Money Laundering Group (ESAAMLG) member countries of Botswana, Kenya, Lesotho, Malawi, Mauritius, Mozambique, Namibia, the Seychelles, South Africa, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.

“Organized economic crime of one form or another exists in most of the ESAAMLG countries. Specific forms of organized crime, which have been linked to money laundering include drug trafficking, armed robbery, tax evasion/customs fraud, exchange control evasion, and motor vehicle theft. A serious corruption plagues virtually every country in the region. Money laundering is therefore an attractive option,” he said adding that drug trafficking alone continues to even increase in Malawi.

“Dagga technically referred to as Indian hemp is mainly grown in the Northern part of Malawi around the town of Nkhotakota. From Nkhotakota the drug is transported to the cities of Blantyre and Lilongwe. Some of it is sold there, and the funds used to purchase basic and luxury commodities. Much of it however, is exported to foreign jurisdictions mainly Zimbabwe, Namibia and South Africa for sale,” said Goredema adding that the drug market in South Africa is the largest in the region with more than 100 syndicates known to be active.

He disclosed that two busts in Douglasdale, north of Johannesburg, and Roodepoort on the West Rand alone yielded massive seizures of dagga, cocaine, ecstasy, Mandrax, and chemicals for the manufacture of Mandrax all valued at US$270 million.

Goderema said that investment in motor vehicles is also a common avenue for laundering illicit funds in the region.

He revealed that an investigation revealed that dealers in this industry in the majority of ESAAMLG countries are not under any duty to report any transaction to the police or anyone merely because they are suspicious about the source of the funds.

“Any individual can buy a motor vehicle from a dealer with cash, whether legitimately or illegitimately acquired. In Malawi, a recent survey showed that no identity particulars are required in motor vehicle purchasing. One can easily buy a vehicle in a fictitious name. Several motor vehicle dealers did not even know what money laundering entails,” explained Goderema.

He added that although figures were not available then it was probable that a significant proportion of motor vehicle sales in the region involve dirty money.

“Vehicles which are usually bought are lorries, minibuses and pick-ups. Drug merchants also use legitimate bank accounts of family members or third parties, to de-link proceeds from underlying illegalities. In some schemes this is done with the connivance of the family member or third party, who allows the criminal to deposit and withdraw money from his or her account,” explained Goderema disclosing that armed robbery was also both a crime of violence and a serious economic and frequently lucrative one in the region.

He further said that currency speculation including tax and duty evasion also occurs in the region to the extent that evidence reveals that Fiscal coffers in Malawi, Kenya and South Africa have even been subjected to plunder resulting in the generation of substantial funds for laundering.

The evidence gives an example of Surtax fraud Goods which are bought in Malawi for export but not subject to the 20 percent surtax levied on those consumed locally.

In the evidence it is exposed that dishonest companies in Malawi have taken advantage by purchasing some commodities on the pretext that they are for export even though they subsequently sell them locally, with a mark-up which includes surtax and the money meant for surtax is thereafter laundered.

The evidence also uncovered that taking advantage of Intra-regional trade in Malawi some drug dealers pass off as curio-exporting businessmen while actually dealing in drug business in the South African market.

“They purport to convey curios to South Africa, but in reality mingle them with drugs for sale. In similar fashion, proceeds from curio sales are combined with the proceeds of drug trafficking. These illicit businessmen not only buy cars and furniture but sometimes physically bring back to Malawi foreign cash and exchange it for Malawi kwacha,” said Goderema.

He added: “In southern Africa, Malawi is a favoured transit country of most launderers from Tanzania, as it is perceived to have a banking system that is easy to use in sending foreign currency to any part of the world.”

Angered by crime hikes in Malawi, late president Mutharika’s government adopted a shoot-to-kill policy which granted policemen to open fire and kill criminals.

The matter however, attracted a lot of criticism from various stakeholders including human rights campaigners.

But the late Mutharika argued that Malawi would not turn from a predominantly importing and consuming country to a producing and exporting country, boost its private sector productivity, increase revenue collection for development and eradicate poverty, if criminals were left free and becoming more clever than law enforcers because their activities put lives of people including investors and their property in danger.

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