Govt in Suspicious Fuel Deal: Awards K128bn contract without tender

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Sheikh Ahmed Bin Faisal Al Qassimi,

Malawi government has awarded a K128 billion fuel supply contract to a United Arab Emirates (UAE)-based company without a competitive tender process, raising concerns about corruption and fraud.

An investigation by Platform for Investigative Journalism (PIJ) has revealed that the deal, facilitated by the National Oil Company of Malawi (NOCMA), involves the procurement of 250,000 tons of fuel at $295 per ton, translating to USD 74 million (equivalent to 128 billion kwacha).

Surprisingly, it is reported that 50% of the payment for the deal will be made upfront to CAl Qassimi, a UAE-based trader, through a Lilongwe-based forex bureau, QLV Digital Fx (Malawi) Limited, registered in the country on September 26, 2023.

By law, NOCMA, as a procurement entity, is supposed to publicly advertise all tenders for competitive bidding of all procurements above the threshold of 100 million Kwacha, which did not happen in this case.

One source has told PIJ that the deal could be a ploy to disguise payments to local officials and may further haunt taxpayers in the future, as the payments in Kwacha agreed upon at today’s rate may be changed to accommodate exchange rate changes.

Meanwhile, experts are questioning the legality of the deal, citing the lack of transparency and competitive bidding, and describe it as a massive attempt to defraud the state.

Michael Kaiyatsa, Executive Director of the Centre for Human Rights and Rehabilitation (CHRR), told PIJ, “The money involved is taxpayers’ money. Such deals mean that taxpayers fund dubious deals, and if they go sour, taxpayers suffer because that money would have been used to procure medicines.”

Concurrently, Youth and Society (YAS) Executive Director Charles Kajoloweka expressed worry about the prevalence and thriving of corrupt cartels in state deals, despite the government having the capacity to do due diligence on the deals.

He said, “If you dig deeper into these dubious procurement deals, you may find specific individuals who are politically connected are the most perpetrators who connive with business persons and suppliers to defraud Malawians.”

The deal bears some similarities to a previous botched fertilizer deal, where the government was defrauded of millions.

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