March 25, 2015 / 1:22 PM / 4 years ago

Global Fund redirects $574 million from Malawi AIDS council

LILONGWE (Reuters) - The Global Fund has redirected $574 million in HIV/AIDS funding away from Malawi’s National Aids Council (NAC) after allegations of financial mismanagement, including the purchase of vehicles that were not budgeted for, it said on Wednesday.

Malawi’s Health Minister Jean Kalilani earlier told Reuters the fund had “pulled the plug” on the funding for the next two years because of the allegations. She said the Geneva-based fund had been misled by “unpatriotic Malawians”.

However, the Global Fund disputed this, saying it had decided earlier this year to channel the assistance, which runs until 2017, through Malawi’s Ministry of Health and the charity ActionAid rather than through the NAC, a public trust that is meant to spearhead the national response to HIV/Aids.

The fund said it had not considered cancelling AIDS funding to Malawi, one of the world’s worst-hit countries and home to more than one million children orphaned by the disease.

“At no time did the Global Fund discuss cancelling the $574 million allocation,” it said in a statement. “Every grant by the Global Fund is approved by the board and any cancellation has to be approved by the board.”

Greater access to medicine, backed by cash from the Global Fund, has helped slash AIDS-related deaths in Malawi, where HIV/Aids has been blamed for 59 percent of deaths among those aged 15 to 59 years in the landlocked southern African nation.

Malawi, a nation of 13 million people which depends on foreign aid for 40 percent of its national budget, has suffered after donors withheld funding over a major corruption scandal in 2013.

The Fund said Malawi had already repaid $3.3 million of improper spending unearthed by a 2012 audit, while an additional unspecified amount of “inadequately accounted funding” identified by donors was “still under discussion”.

Kalilani said the Fund had asked Malawi to repay a total of $6.4 million. She did not provide a breakdown.

Writing by Ed Cropley; Editing by James Macharia and Gareth Jones

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