Foreign donors have suspended £150-million of aid until a scandal allegedly involving civil servants, MPs and businesspeople is cleared up.
Malawi is bracing for the mass trial of 100 civil servants, politicians and businesspeople involved in the alleged looting of more than $100-million from government coffers, a case that has become a litmus test for foreign donors backing the government of Joyce Banda.
The "cashgate" trial is scheduled to start on Wednesday under pressure from donors who bankroll 40% of the government's budget and who have said they will withhold some aid until it is clear that it is not being misused.
"We are under extreme pressure" to prosecute the cases, says Bruno Kalemba, the director of public prosecutions.
"There are lots of files on my desk that need to be dealt with. There are warrants of arrest and a lot of follow-ups. This has become an emotional issue."
The pressure for swift action has come from donors, who have suspended pledged aid worth $150-million until Banda, who came to power in 2012 following the sudden death of president Bingu wa Mutharika, "cleans up the mess" of corruption and speedily prosecutes all suspects.
"We will not be able to resume support through government systems until we have a clear assurance, independently verified, that our resources are all being used for their intended purpose," said Sarah Sanyahumbi, a British diplomat who heads the donor grouping, which includes European countries, the European Union and the World Bank.
Britain has withheld £17-million of budget funds.
The British high commissioner to Malawi, Michael Nevin, says withholding of the aid "is not about punishing Malawi … we want government to put its house in order by implementing systems that will not allow pilferage of public funds."
The case comes just four months ahead of elections in Malawi.
Some political pundits are hoping that among the suspects some will be bold enough to link the president to the public looting.
Speculation about her involvement has been rife here since the scandal was revealed following the shooting of budget director Paul Mphwiyo in September.
Mphwiyo is reported to have been on the verge of exposing a corruption ring when unknown gunmen shot him outside his home on September 3.
He survived the shooting and went for specialised treatment in South Africa.
Mphwiyo will be the number one state witness during the trials.
Billy Banda, director of rights group Malawi Watch, said: "What Malawians can conclude is that the president's hands are not clean in this issue … somewhere and somehow the president's hands are there in this scandal."
Banda said Malawians would be interested to know how much the president knew about the looting, which her government has blamed on loopholes in the payment system. "There are so many questions that need to be answered."
A Catholic rights group has accused Banda of being "part and parcel" of the fraud scandal.
Peter Chinoko, an outspoken head of the Catholic Commission for Justice and Peace in the Lilongwe archdiocese, said: "We have concrete evidence about the president's involvement and being part and parcel of the scandal."
Chinoko said the looting was aimed sponsoring the campaign of Banda's ruling People's Party, which was only formed a year ago with no national grassroots support, ahead of May 20 local, national and presidential elections.
Information Minister Brown Mpinganjira, a key backer of Banda's policies, has dismissed the claims by Chinoko, saying this was a "plan to blackmail the president so that she stops the investigations currently under way".
"The president is being threatened to embarrass and frustrate her efforts to fight corruption," Mpinganjira, a veteran politician said.
"This is a well planned and calculated strategy by those that are trying to run away from the full force of the law to try and smear as many individuals as possible."
Joyce Banda has said she took a "political risk to launch a fight against corruption five months before the elections".
She says the fight against corruption "must come first, winning elections comes second to me".
One prominent figure on trial is businessperson Oswald Lutepo, a senior official in Banda's party, who is accused of theft and money laundering and is alleged to have pocketed more than $6-million from government coffers through ghost companies which did not provide any services to the state.
Lutepo is said to have donated 22 vehicles to Banda's party and paid a record bail bond of $100 000.
Malawians will also follow with keen interest the evidence in court of former justice minister Ralph Kasambara, who has been charged with attempted murder of Mphwiyo although police have yet to establish the link between the shooting incident and the scandal.
The president has publicly claimed that Mphwiyo's shooting was "a planned and targeted attack aimed at silencing him and the government in the fight against high levels of corruption and fraud".
She has often insisted Mphwiyo will give the correct version of events leading to his shooting.
She has conceded that corruption is deeply entrenched in Malawi, but insists that it predates her tenure by years.
Nonetheless, the case represents a threat to her hopes of winning the presidency in May.
Billy Mayaya, director of the National League for Democracy and Development, told the Guardian the scandal means her chances of winning are "very slim".
She said: "Malawians are angry at the massive looting of government resources and want answers as who is really behind this rot." – guardian.co.uk © Guardian News and Media 2014. .