Scandal: Malawi engages fake firm in K128 billion fertilizer deal to loot public funds


Malawi Congress Party (MCP) operatives, disguised as a fake Romanian company, have set up a scheme to loot K128 billion through a fraudulent fertilizer deal that Malawi ‘signed’ with a ghost Romanian company.

Malawi24 understands that the operatives were also the mastermind of the previous deal which embezzled K750 million through a fraudulent butchery masquerading as a fertilizer supplier.

Malawi Government’s K128 billion fertilizer deal has been signed with Malawians and there are no Romanians involved, raising suspicions that MCP operatives under the cover of a fake Romanian company wants to dupe Malawi Government.

A published report indicate that no Romanian has been involved in the deal despite Government through its Minister of Agriculture Sam Kawale claiming that the K128 billion fertilizer deal is between government and East Bridge Estate SRI of Romania.

Under the fertilizer deal, Government says East Bridge Estate will supply 600 000 metric tonnes (MT) of fertilizer in commodity exchange/ barter agreement and the contract will run until July 24 2024. .,e

Government will pay back for the fertilizer with commodities but in case this does not happen, it has also signed a sovereign guarantee which will allows East Bridge to borrow K128 billion with the guarantee that Malawi Government will pay back.

All indications point to a murky deal, as East Bridge’s website shows a company that is focused on medical equipment and has no fertilizer production line. Its financial statement gives a picture of a company that has been posting losses allegedly to evade taxes and which appears to have a few employees, raising doubts about its existence or capacity to carry out the fertilizer deal.

Kawale told the public broadcaster that it was East Bridge that approached the Ministry in September 2022 but he could not name the people that approached Government. He later claimed that the Romanians have been in Malawi for three years.

Reports indicate that a new company called East Bridge Commodities and Logistics has been registered in Malawi by Malawians and has been “subcontracted” by East Bridge to manage the fertilizer deal locally.

“The Investigator Magazine has confirmed that Principal Secretary in the Ministry of Agriculture Madrina Mlodza Banda signed the agreement on behalf of government with two Malawians, not Romanians, lawyer Likhwa Mussa and one Ted Moya who have registered a company locally as a subcontracted group of East Bridge Srl.

“Kawale cannot produce credible Romanians as due diligence reports were largely faked and the deal is between Malawians, using the Romanian address,” the Investigator Magazine reported.

The Investigator also quoted a source who said the deal means that Malawi Congress Party operatives and the suppliers that Secretary to the President Colleen Zamba has been negotiating in South Africa and Dubai “will use the cover of East Bridge to supply fertilizer at a very high cost.”

Commodities which government will exchange with the fertilizer include 250 000 MT of soya beans, 250 000 MT of groundnuts, 200 000 MT each of pigeon peas and maize, 50 000 MT each of rice and sorghum and 25 000 MT each of cotton and sugar.

However, experts have expressed doubt if Malawi will be able to source such quantities of the commodities considering the effect of Cyclone Freddy on the country’s agriculture production as well as the impact that La Nina is expected to have next season.

Speaking to The Investigator, an expert from the Ministry of Agriculture said the Minister has exposed his lack of understanding of agriculture production in Malawi by signing such a deal.

The Minister has been urged to cancel the deal since failure to pay with crops means Malawi will pay with cash for the fertilizer it is expected to receive.

“Malawi failed to fulfil 187,000 tonnes of maize flour to South Sudan. It is laughable that the whole Minister of Agriculture would go in public to state that we will supply 200,000 tons of pigeon peas when we only grow 78,000 tons. The problem is that Mlodza Banda and the Minister are overriding experts. This deal, the barter trade is a disaster in making. It is simply cashgate, it should be cancelled. If they want and they are sincere, let them advertise for anyone who wants commodities,” the official told The Investigator.

The dubious fertilizer deal comes months after government paid K750 million to a United Kingdom based butchery for the supply of fertilizer. The fertilizer was never supplied and the money is yet to be recovered.

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