A few months later, the US government accused Mmobuosi of fraud over his business dealings. Climate Home News visited Mchenga this month and found the new homes have cracks in the walls and floors, with residents scared they will collapse.

Emma Jeremia, a pregnant woman living in one house, said it would have been better to die in the storm than be killed by her house collapsing on her. Simon Mweyeli, who liaised with the Red Cross on behalf of Mchenga’s residents, said the homes can “fall anytime”.

This unsafe housing for cyclone survivors in Malawi, funded by a suspected fraudster, shows why governments need to get the new UN loss and damage fund up and running with decent resources and quality control, climate campaigners told Climate Home.

Cracks in the wall inside one of the homes in Mchenga, Malawi, pictured on May 8, 2024 (Photo: Raphael Mweninguwe)

International climate justice activists said the local testimonies show why funding for disaster victims should come from the governments that have predominantly caused the climate crisis rather than unaccountable benefactors – and recommended that affected people should be involved in designing and building their new homes.

After last year’s devastating cyclone – with the loss and damage fund not yet up and running – the cash-strapped Malawian government went looking for financial help around the world. According to national media, ex-president Bakili Muluzi recruited Nigerian businessman Dozy Mmobuosi.

The day after promising to build the homes – and the same day he was accused by short-selling firm Hindenburg Research of operating a scam company – Mmobuosi received a Malawian diplomatic passport, which is usually reserved for senior politicians, national media reported.

“Such instances highlight why we need a loss and damage fund that empowers affected communities to lead recovery and reconstruction efforts, and not allow politicians or corporations to further their own interests,” said Harjeet Singh, a climate activist who has long advocated for the fund.

In 2022, governments finally agreed at the COP27 climate talks to set up such a fund to channel money from wealthy nations to people in developing countries who have been harmed by climate change. The fund’s board hopes it can start distributing money next year.

Cyclone Freddy strikes

In March last year, Cyclone Freddy travelled from the west coast of Australia across the Indian Ocean over Madagascar and into southern Africa, where it caused floods and mudslides that killed more than 1,000 people in Malawi.

The village of Mchenga, in Malawi’s southern Phalombe district, was among the worst-hit. Its 72-year-old headman Laften Nangazi told Climate Home that 80 people died there in a single day.

He said he saw men, women and children being swept away in despair. “I cried when I saw children dying,” he said, “I saw about 40 people in a tree, and they were there for three days waiting for the water levels to go down.”

When the waters eventually receded, 176 of the village’s families were left homeless – a problem repeated across the country’s south.

Hendry Keinga reacts after he lost a family member during the Mtauchira village mudslide in the aftermath of Cyclone Freddy in Blantyre, Malawi, March 16, 2023. (REUTERS/Esa Alexander)

Looking for funds

Malawi is the world’s tenth poorest country, so government money to rebuild housing was scarce. The international fund for loss and damage, meant to address disasters like this, had just been agreed at COP27 but was not yet up and running.

President Lazarus Chakwera invited his three living predecessors for a meeting. Two of them – Bakili Muluzi and Joyce Banda – showed up and were made “Goodwill Ambassadors of Tropical Cyclone Freddy”, national media reported.

Muluzi’s son Atupele told Climate Home that his father and Banda tried to access finance “to support the very real costs to the country for housing, social infrastructure, agriculture and industry as we try to rebuild in a resilient manner”.

“Of course, the global economy and international politics means that this is a challenging task in the midst of the chaos, conflict and climate impact everywhere in the world,” he added.

To meet this challenge, Bakili Muluzi turned to Mmobuosi, a Nigerian businessman and founder of mobile banking company Tingo Group, who was then in the news for trying to take over English football club Sheffield United.

Twitter

Controversial Nigerian tech entrepreneur Dozy Mmobuosi recently visited the country to participate in the launch of a Cyclone Freddy relief project in Phalombe, an event supported by former Presidents Bakili Muluzi and Joyce Banda. pic.twitter.com/w1WlzANAKM

— Platform for Investigative Journalism – Malawi (@PlatformMalawi) June 15, 2023

On June 6, Mmobuosi, Muluzi and Banda travelled to Mchenga to launch construction work on new houses, posing with a foundation stone bearing their names. On Facebook, Banda said the houses “will be made possible because of a generous contribution” from Mmobuosi, who she called “a distinguished son of Africa” and “good friend” of Muluzi.

The next day, according to the Platform for Investigative Journalism, Mmobuosi met with Muluzi and President Chakwera at the president’s home. The Nigerian was unusually quickly granted a diplomatic passport, usually reserved for top Malawian politicians and their spouses.

“Exceptionally obvious scam”

But on the same day Mmobusi was in Mchenga, Hindenburg Research, which specialises in “forensic financial research”, accused his Tingo Group – which says it provides mobile banking to farmers – of being “an exceptionally obvious scam with completely fabricated financials”.

Hindenburg was short-selling Tingo Group shares, so it stood to profit if the share price of the firm – listed on the Nasdaq stock exchange in the US – went down.

Hindenburg accused Mmobuosi of inventing much of his backstory, of settling out of court with Nigerian authorities over alleged bad cheques in 2017, of photo-shopping Tingo logos onto planes to claim the company had an airline, and generally exaggerating the company’s assets.

While Muluzi stood by him, in December 2023 the US Securities and Exchange Commission (SEC) sided with Hindenburg. They accused Mmobuosi of a “staggering” fraud against Tingo’s investors.

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The SEC’s 72-page complaint included images of what it said was a real and an edited Tingo bank statement. The edited one had several zeros added to the balance.

US authorities charged Mmobuosi with security fraud and froze his assets. His whereabouts are reportedly unknown. If found guilty, he faces up to 20 years in prison.

On October 6 – after Hindenburg’s complaint but before the SEC’s – Muluzi and Mmobuosi went back to Mchenga village in Malawi to hand over the first batch of 17 houses.

Muluzi thanked Mmobuosi for the funding and said he had “committed to buy beds, mattresses and furniture for the households and also to bring solar electricity to the area”. In December, another 28 houses were handed over.

@MalawiRedCross has today handed over 45 houses to beneficiaries of T/A Phweremwe in Phalombe, that have been constructed with funding from The Dozy Mmobuosi Foundation through Goodwill Ambassador on TC Freddy Former President Dr Bakili Muluzi. pic.twitter.com/hVhOYdScjS

— Malawi Red Cross Society (@MalawiRedCross) December 19, 2023

Cracks and missing crockery

But five months on, when Climate Home visited the village, residents complained the homes were too few, dangerous and small, adding they had not yet received the promised furniture or solar power.

Jeremia said her father was given one of the houses but she sleeps in it instead. “He and my mother and my other siblings are living in a rented house. They cannot stay in a house that is threatening their lives. After all, it’s also a very small house to accommodate all of us,” she said.

Mweyeli, the chair of the village civil protection committee, said most new homes are “showing cracks – a sign that these houses are of sub-standard”. He said the first 17 homes were built with 45 bags of cement, but the later 28 were built with just 28 bags, making them weak and liable to fall down.

He demonstrated how the floors were made of sand covered by plastic with a “thin layer of cement which is now showing cracks all over”.

Simon Mweyeli shows cracks in the floor of one of the houses, which he said were sand covered by plastic and a thin cement layer

Charles Macheso, who climbed a mango tree to save himself from the cyclone but lost all his possessions, said village coordinators told the Malawi Red Cross that more cement was needed. But, he said, the Red Cross officers “were so defensive”. Mweyeli said he called the Red Cross to report the cracks and the aid organisation came to take pictures.

Charles Macheso in Mchenga village on May 8, 2024 (Photo: Raphael Mweninguwe)

Asked about these houses, the Malawi Red Cross’s communications specialist in the capital Lilongwe, Felix Washon, initially told Climate Home to go see them, and then hung up the phone without answering further questions.

“Not aware”

After a two-day journey from Lilongwe to the village, Climate Home contacted Washon again and was told by email that “we are not aware of any report about cracking of houses in Phalombe [the district that covers Mchenga]”.

Washon later said the Red Cross had a contract to build the homes with Muluzi rather than Mmobuosi. “We never received any money from Dozy [Mmobuosi] – direct from Dozy,” he said by phone. “Malawi Red Cross Society has no other links or contracts with Dozy,” he added.

Climate Home News emailed the contact address listed on the Dozy Mmobuosi Foundation’s website, but the email bounced.

Mmobuosi told Arise News in February that he was “taken aback” and “shocked” by the SEC’s allegations about Tingo Group. He said he had not run Tingo directly for seven years, adding that his lawyers were “on top of” responding to the SEC charges and that Tingo was conducting its own internal investigation. Mmobuosi is not currently listed as a member of the company’s board of directors.

In Mchenga, village headman Nangazi told Climate Home that 131 families are still without a home and called on national organisations like the Catholic Development Commission – that has provided iron sheets – to help build more accommodation.

Ida Mayilosi, 75, is one of those who missed out. “I wished I had also been assisted,” she said. “This house I am living in was built by some relatives but it took time.”

Ida Mayilosi, whose house was destroyed by Cyclone Freddy, sits in Mchenga village, May 8, 2024 (Photo: Raphael Mweninguwe)

Mattias Söderberg, climate lead for Danish charity DanChurchAid, which is currently building homes in Nepal after landslides there, said support for communities to rebuild after extreme weather that causes loss and damage “should be done so that they are more secure and robust to face the next climate-related disaster”.  “Investments which are not adapted risk being lost,” he added.

Singh – who fought to solve similar problems in India’s Andaman and Nicobar islands following the Indian Ocean tsunami in 2006 – said he had seen “firsthand how involving communities not only places them in the driving seat but also ensures accountability”.

(Reporting from Raphael Mweninguwe in Mchenga and Joe Lo in London; editing by Sebastian Rodriguez and Megan Rowling)

The post In Malawi, dubious cyclone aid highlights need for loss and damage fund appeared first on Climate Home News.

Flood water had destroyed all her corn crops, an essential lifeline to feed her family and earn a modest income. The spiralling costs of seeds and fertilisers put replanting beyond her reach.

“The cyclone left me completely with nothing”, she told Climate Home News.

As Sandram searched for help, she said no relief was available aside from the limited support she could obtain from family members.

Elube Sandram was among the beneficiaries of the UK-funded programme in Malawi’s Chikwawa district. Photo: Raphael Mweninguwe

Her problems could have been prevented. In 2018, she registered for a £52 million ($63m) UK aid programme which helped vulnerable Malawians better cope with climate-driven floods and droughts.

But during the Covid-19 pandemic in 2020, the UK government cut back its aid spending, ending support for Sandram and many others in Malawi and around the world.

Let down

The programme that Sandram was involved with was run by UN agencies and NGOs and helped farmers by providing them with tools, training on things like pig farming and financial assistance like weather-related insurance or cash transfers.

The idea was that it’s not quite so disastrous if a flood or a drought destroys a farmers’ crops if they have livestock or an insurance payout to keep putting food on the table.

But following the UK’s cutbacks, several parts of the scheme have been reduced or axed altogether.

The activities run by a group of NGOs were wound down in 2021, two and a half years before their scheduled end. Concern Worldwide and Goal Malawi, the main implementing partners, closed their local offices. Only a series of projects with a more limited scope operated by UN agencies are still running.

Aubrey Kabudula, a farmer from Kwataine Village in Chikwawa, told Climate Home: “We were told that one of the objectives is to help people to be climate-resilient.”

“With its abrupt closure we do not think that has been achieved,” he said.

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It is an assessment shared by the Independent Commission for Aid Impact (ICAI), the UK body tasked with scrutinising how foreign aid is spent.

In June, they said that the project had been “highly effective and coherent” but had been “undermined” by cutbacks to aid and the downsizing or removal of components.

A rice field in Malawi’s Karonga region affected by drought in early 2023. Credit: Eldson Chagara

Issues are only likely to get worse. Malawi is increasingly struggling with more frequent and intense cycles of flooding and droughts. The passage of Cyclone Freddy in March killed more than 600 people and displaced at least 650,000 more, while also dismantling infrastructures and livelihoods.

Climate shocks have exacerbated poverty levels, especially for rural farmers. The World Bank estimates that over half of the country’s 19.1 million people live in poverty with women being the most affected. Low agriculture production because of droughts and floods is cited as one of the main causes.

Rishi Sunak’s rollbacks

Countries like Malawi cannot afford to address these problems alone.

Unsustainable levels of existing public debt rule out borrowing at expensive rates as an option. Most of Malawi’s climate plans are funded through grant-based international public finance provided by rich countries like the United Kingdom.

At the United National General Assembly in 2019 the then-prime minister Boris Johnson made a big, and unexpected, announcement.

He promised the UK would double its international climate finance to reach a target of £11.6 billion ($14.2bn) in 2026.

Only a few months later the global Covid-19 pandemic upended daily lives and economic orders, prompting an abrupt rethink of spending priorities.

International aid was one of the casualties. Then finance minister Rishi Sunak cut its foreign aid target from 0.7% of gross national income to 0.5%.

With Sunak now prime minister, this “temporary measure” has yet to be reversed.

Since then, the competition for a shrinking pool of money has intensified as aid funding has been diverted to support Afghan and Ukrainian refugees hosted in the UK.

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An internal government document reported on by the Guardian suggested the £11.6bn goal could be dropped as general aid cut-backs make it a “huge challenge”.

Not just Malawi

The cuts have hit climate projects around the world. UK-funded climate resilience projects have been cut or delayed in India, Pakistan, Nepal, Kenya and small-island states.

Government figures show that the number of people whose climate resilience was improved by UK aid flatlined for the first time since records began in the last financial year.

In India, a foreign office report found that budget cuts meant that activities to help rural communities cope with climate impacts had been “reduced, slowed down and stopped in some instances”.

In Pakistan, a foreign office report found that a £38 million ($46m) climate resilience plan had been paused for 18 months because of “uncertainty… following significant and unanticipated costs incurred to support the people of Ukraine and Afghanistan in finding refuge in the UK.

A large-scale project aiming to help a series of African countries build resilience to climate change suffered a significant “scale back from its original ambition”, as its annual summary said.

The programme envisaged a £250 million ($306m) budget in its business case, but this has now been reduced to “up to £100 million” ($122m).

Targets have been scaled back too. One original target was to improve the resilience of four million people through an early-warning system. That’s been reduced to three million.

In Chikwawa the climate project has still left a mark in the minds of many people despite the cutbacks.

The beneficiaries now hope that the country, a former British colony, will not be entirely forgotten.

“I am still optimistic that the assistance that we were receiving from the donor [UK government], will not be gone forever,” said Sandram. “And if I were to be asked whether that funding should resume or not, I will say it should resume because climate change is here to stay.”

The post UK aid cuts leave Malawi vulnerable to droughts and cyclones appeared first on Climate Home News.

In a report published on Tuesday, the anti-poverty charity found that nearly 80% of climate finance to developing countries took the form of loans, rather than grants. Poor nations were expected to pay richer countries back, often for investment in projects with weak climate credentials.

“The excessive use of loans and the provision of non-concessional finance in the name of climate assistance is an overlooked scandal,” the report said.

In 2009, rich countries committed to mobilise $100 billion per year by 2020 to help vulnerable nations cut their emissions and cope with climate impacts.

Oxfam analysed the latest climate finance figures from 2017-2018, when developed countries reported delivering $59.5 billion in climate finance, about 33% more than in 2015-2016.

In total, rich countries gave just $12.5bn in the form of grants, $22bn in loans with better-than-market rates and around $24bn in loans with standard market rates. Interest charges and payments to creditors were not deducted from donor countries’ climate finance figures.

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Report co-author Tracy Carty identified Japan and France as having the biggest grant-to-loan imbalance in their climate finance, with just 3% of their overall contributions attached to grants.

Both were among donor countries giving out the highest percentage of market-rate loans, respectively 24% and 16% of their contributions. Market-rate loans made up 55% of Spain’s climate finance and 22% of Germany’s.

In contrast, other donor’s contributions were almost 100% grant-based, including Australia, the EU, the Netherlands, Sweden and Switzerland.

Carty said the coronavirus pandemic meant that more developing countries were unable to take on more debt for climate projects and so, now more than ever, climate finance should take the form of grants over loans.

“Against a backdrop of rising and unsustainable debt in many low income countries, there’s a clear risk that finance that should be helping countries respond to climate change could be harming them in other ways,” said Carty.

Officials from Angola and Belize last week told Climate Home News that their falling revenues and ballooning debt meant they would find it hard to invest in medium and long-term climate adaptation projects.

Last week, over 550 global civil society organisations called on G20 finance ministers to cancel countries’ debts in the wake of the Covid-19 pandemic. Instead, they suspended debt repayments for six months.

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Oxfam have called on all donor countries to agree to record the ‘grant equivalent’ of their climate finance and the terms of any loans in their annual reporting as countries are due to meet for UN climate talks in Glasgow, in November 2021.

The analysis pointed out to another reporting issue with some rich nations’ figures including in their climate finance the full cost of projects which were only partly related to addressing climate change.

For example, the full cost of building a school could be counted as climate finance if part of the funding was to make the school more flood-proof.

In other instances the money was used to support fossil fuel expansion if the project was deemed to cut emissions. Japan claimed it provided $700m in climate finance to Bangladesh but the money was in fact a loan to build the Matabari coal power plant. Tokyo justified the project claiming the plant was cleaner and more efficient than other power plants.

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Oxfam warned not enough funds reached the poorest countries and small island developing states to help them cope with intensifying climate impacts, according to countries’ submissions to the OECD and UN Climate Change.

Germany, France, Japan, Canada and Norway gave less than 20% of their climate finance to least developed countries (LDCs) . At the other end of the scale, Denmark directed 41% of its finance to LDCs.

Several nations gave less than 1% of their finance to small island developing states, including Germany, Japan and the UK, while Australia directed half of its funding to them.

Oxfam called on countries to report the percentage of their finance which goes to LDCs and SIDS and cast doubt over whether countries are accurately estimating the amount of private climate finance they claim to have ‘mobilised’.

Some countries did include an estimate of ‘mobilised’ private finance in their figures while Japan claimed to have leveraged $4.5bn in 2017-2018.

At UN climate talks in Poland in 2018, nations agreed guidelines on how to count ‘mobilised’ private finance towards climate finance figures. These principles will be implemented at the Cop26 talks in Glasgow next year, when Oxfam said they should be “strictly applied”.

The post Oxfam: Rich countries are not delivering on $100bn climate finance promise appeared first on Climate Home News.

Prime minister Boris Johnson’s announcement of the closure of the Department for International Development (Dfid) last week caught the development sector off guard.

Aid experts expressed fears the UK was turning its back on the world’s poorest, just as a global economic downturn following the coronavirus pandemic made them more vulnerable.

A spokesperson told Climate Home News the government remains committed to a pledge made last year to double its contribution to international climate finance to £11.6 billion between 2021 and 2026. In a statement, they said the money would support “clean growth, reducing carbon emissions and helping the poorest countries manage the impacts of climate change”.

Foreign secretary Dominic Raab, who will oversee the new department, walked back comments from Johnson suggesting aid would be redirected to middle income countries that could further British strategic interests.

Yet questions remain over how UK climate finance will be allocated, as the overall aid budget shrinks.

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The Department for International Development (Dfid) is responsible for running programmes that help vulnerable countries cope with the impacts of climate change. Last year, it spent £11 billion – about 73% of the UK’s total overseas development assistance.

As the UK prepares to host critical UN climate talks, known as Cop26, in November, the merger raises the prospect of linking aid with diplomacy to leverage climate action. There could be tension with other diplomatic goals, such as striking favourable trade deals after Brexit.

The UK is committed to spending 0.7% of its national income on aid, but the absolute value of that is contracting along with the economy. Government departments have reportedly been asked to identify 30% cuts to their aid budgets. Priority areas to safeguard include climate change, efforts to tackle Covid-19, girls’ education and poverty reduction.

Aid money used to develop carbon-cutting initiatives, managed by the UK’s energy department, is already largely directed at middle-income countries with growing emissions. According to government figures, the energy department spends around a third of the UK’s international climate budget, while 63% is managed by Dfid.

While low-income countries still receive the majority of UK aid, a growing share is being directed to middle-income countries seen as critical to British interests from a security, economic and emissions reduction perspective, according to a parliamentary report published earlier this month – a trend that could accelerate as the government aligns aid spending with foreign policy objectives.

The report urged government to direct aid “to countries where there is the greatest likelihood of reducing poverty”.

The UK’s Independent Commission for Aid Impact (Icai) warned in February 2019 of creating a vacuum for low carbon development in low-income countries. It also found the foreign office to be failing to meet aid transparency targets.

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The government is hoping to encourage countries to submit more ambitious climate plans ahead of critical UN climate talks in Glasgow, UK, in November 2021.

Earlier this week, the government’s official climate advisors, the Committee on Climate Change, said the UK needed to be “an exemplar in continuing to provide climate finance” to the most vulnerable communities, as the impact of Covid-19 on the global economy will reduce available funds.

“The UK has a strong established reputation as one of the largest development aid donors and is respected for its efforts to help support vulnerable countries dealing with the impacts of climate change. This has helped the UK play an important role in the international climate negotiations that resulted in the global Paris Agreement on climate change,” the committee wrote.

A government spokesperson said the ministerial merger will help the government “seize the opportunities” ahead of the Glasgow climate summit. The Cop26 presidency has made adaptation and resilience to climate change a key pillar of next year’s summit.

However, Johnson’s comments that aid to Zambia and Tanzania could be redirected to Ukraine and the Western Balkans risks undermining the UK’s alliance-building efforts, said Andrew Norton, director of the International Institute for Environment and Development (IIED).

It is “a perverse and damaging signal to give to the poorest countries,” he told CHN. “Continuing to direct climate finance to the vulnerable countries that need it will be profoundly helpful in building the alliances crucial for making the next climate summit a success.”

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Thabit Masoud, programme director at charity Care in Tanzania, told CHN if there was to be a reduction in aid to Tanzania, “it’s obviously the poorest and mostly the vulnerable rural women who would suffer the most”.

“The UK’s leading role as a climate finance contributor must not depend on the strategic value of poor countries to the UK,” he said.

Andrew Scott, director of the Overseas Development Institute’s climate and energy programme, said it would be “embarrassing” for the UK to change its priorities in the run-up to Cop26 and money was unlikely to be redirected between now and the summit next year.

“I don’t think you can change the course of a super tanker very quickly,” agreed Kate Levick, who leads think-tank E3G’s sustainable finance programme. But changes could appear in the longer term, she said.

The government has said it would maintain current rules overseeing UK aid and climate finance. Maarten van Aalst, director of the Red Cross’ Climate Centre, said the merger presented an opportunity for a joined-up approach that would “use the diplomatic machinery with the aid budget to achieve a common objective”.

But the “carrot” approach is unlikely to be effective in raising ambition, argued Scott, noting many developing countries already have climate targets that are conditional on receiving additional finance from richer nations.

The post UK makes assurances on climate finance amid concerns over aid restructuring appeared first on Climate Home News.