Amateur leadership: Chakwera’s Tonse to cancel botched East Bridge Fert Deal
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LILONGWE-(MaraviPost)-President Lazarus Chakwera’s Tonse Alliance government is running out of ideas to address the ailing economy hunting Malawians since 2020.
Chakwera’s inconsistency and amateurism in running state affairs continue to cost the nation heavily.
This is testified by the current position of the International Monetary Fund (IMF) on a botched fertilizer procurement deal
with Romanian firm East Bridge Estate.
Eventually, Malawi tells the IMF that it will cancel the deal.
In a Letter of Intent, dated June 30, 2023, to IMF Managing Director Kristalina Georgieva, Finance Minister Sosten Gwengwe
and Reserve Bank of Malawi (RBM) Governor Wilson Banda says the barter deal to secure access to fertilizer in exchange for crops raised a number of governance concerns.
Gwengwe and Banda note that Attorney General (AG) Thabo Chakaka Nyirenda advised that the deal be halted because
the transaction was undertaken without the proper procurement and authorization procedures.
“In light of this, we are taking all the necessary steps to nullify this deal and to avoid a recurrence of such incidences in the future. We also confirmed that the government has a manual repository of contracts (which are also recorded in Excel) and has made available to fund [IMF] staff a full repository of contracts that would give rise to actual or contingent external debt liabilities of the government and the RBM.
“We recommit to following the appropriate public procurement procedures and adhering to the limits on contracting and
guaranteeing non-concessional and concessional external debt set forth in the PMB [the Staff Monitored Program with Executive Board involvement]. We requested governance diagnostic technical assistance from fund staff to
identify any weaknesses in regulation, legislation, and compliance,” the top officials say.
Human Rights Defenders Coalition Chairperson Gift Trapence told the Daily Times that he was not surprised that the
government is taking steps to halt the deal.
Trapence said Malawians questioned the whole contract right from the beginning.
“This is an embarrassment to the government. Government should show real commitment to issues of accountability and
transparency and should make sure it adheres to procurement procedures to avoid loss of taxpayers’ money through lawsuits for careless decision-making,” Trapence said.
On July 4, the Malawi Law Society (MLS) wrote the Office of the AG, Anti-Corruption Bureau (ACB), and the Director of Public Prosecutions (DPP) asking them to investigate the deal with East Bridge Estate.
As part of the deal, Malawi is expected to pay back, in the form of produce, 250,000 metric tonnes (mt) of soya beans at
US$528 per mt— which translates into US$132,000,000 (MK132 billion) — and 250,000mt of groundnuts at $725 per mt costing US$181,250,000 (about MK182 billion).
MLS claimed in its letter that the deal flouted some of the country’s laws.
MLS President Patrick Mpaka noted, in the letter, that there appears to be a violation of procurement and public finance
management laws.
“[There are violations of laws] starting with an apparent failure to obtain certification from the Minister of Finance that
funds were available for the procurement, going through due diligence to initiation and conduct of procurement proceedings and ending with apparent illegitimacy of the signatures on the agreements,” it reads.
In June this year, details emerged that the government had signed a US$124.5 million (MK125 billion) agreement with the
Romanian company before its consultations with the ACB were finalized.
It transpired that, in April this year, the Ministry of Agriculture wrote the ACB, asking it to conduct due diligence on
the company but, before consultations between the ministry and the ACB were finalized, the government proceeded to sign the contract.
Recently, government spokesperson Moses Kunkuyu defended the deal, saying Malawians should not be worried because no
money will be paid before the product is supplied.
Kunkuyu further said this is a commodity exchange deal where, after the company has supplied the fertilizer, the
government is going to pay back using farm produce such as soya, maize, and other products.
The overrated Agriculture Minister Sam Kawale was all over in media houses justifying the botched deal with Romanian firm
East Bridge Estate.
Source: Daily Times
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