Written By: Edison Brown Kalichelo; Nathan Elliot Nyondo; and Kingsley Nkanda
Edited by: Innocent Marshall
Malawi has narrowly escaped a boiling broth in what would have been a June Fuel Crisis that would have battered and rammed the new administration and the people in equal nasty measures. While the administration would have suffered a brutal knock on its legacy and trajectory, we, the people, were bound to suffer the bruising economic effect through rising prices on the market that would have been inspired by the fuel scarcity.
Not long ago, as we all believably remember, there was fierce stand-off between the National Oil Company of Malawi (NOCMA) and the Malawi Energy Regulatory Authority (MERA). On one hand, NOCMA is a government-owned company formed in line with the National Energy Policy and is responsible for fuel importation, management and distribution. It is charged with the duty to ensure that there is no disruptions on supplies of liquid fuel (petrol, diesel and paraffin) in the country. On the other hand, MERA is a corporate body established under the Energy Regulatory Act, as the regulator of the energy sector in Malawi. It is endowed with such other incidental duties, powers and responsibilities.
By May 2021, the age of the bickering stand-off between these two bodies was about eight months. This was two import durations of 4 months each. But then, what was the straw that broke the camel’s back?
Few months after the inception of Tonse Alliance administration (if you prefer it known that way), a corruption cabal began manifesting its pre-meditated mafia operations: A god of deals established a proxies’ cabal and ensured their positioning in strategic possible places where looting was targeted. Among others, these places include the energy sector where the chief proxy is the Minister of energy himself Newton Kambara.
In this particular energy deal, Minister Kambara was on a mission aided by other assigned proxies including Chris Chaima Banda (a State House employee) and Enock Chihana (AFORD President). A sworn statement in our possession as submitted by NOCMA’s acting CEO Ms. Hellen Buluma to the Anti-Corruption Bureau (ACB) on 26th November 2020 is not shy from mentioning these names and we refer to it in evidence. I am now reminded to say that Ms. Buluma is a renowned DPP member who is enjoying a miracle of being maintained on a job that was ‘rewarded’ to her by the ousted DPP administration. Perhaps her kind offering in resisting and disclosing the cabal is what has, so far, earned her a surprising prolonged stay in this new administration. We may wish not to debate against the fact that her gesture is, in-deed, patriotic.
Shire Times can reveal that the god of this corruption cabal, who is a founding leader of one of the key partners in the alliance administration (as we may call it), took advance kickbacks, through his proxies, from Trafigura and Oryx which were among the bidders of the 2021/2022 fuel supply contract to NOCMA. Indeed, we can further disclose that Minister Kambara, Mr. Chris Chaima Banda and Mr. Enock Chihana gave a series of instructions, though in vain, to NOCMA through its acting CEO to award contracts to Trafigura and Oryx. These instructions were given during the fuel tender in September 2020 and on 23rd September 2020 before the bids were opened. This behaviour is so abnormal and offensive to the rules, regulations and laws governing tendering process.
In fact, as per special report prepared by the Parliamentary Committee on Natural Resources and Climate Change which inquired into the stand-off between NOCMA and MERA, Trafigura had already dubiously signed a Memorandum of Understanding awaiting to be offered the contract even though evaluations were not conducted. This Parliamentary Committee was even left shocked, as it confesses in its report, upon learning that not only did this corrupt cabal strangely give instructions to NOCMA on who should be awarded the contracts but also specified the volumes of the quantities to be awarded to these suppliers who are evidently their looting conduits.
When NOCMA fixed its feet to the ground and repelled these obnoxious and criminal-scented instructions, the straw was heaped and thrown at the camel’s back from a higher ground. The criminal cabal conspired with other proxies positioned at MERA to abuse MERA’s regulatory powers and authority in a bid to either compel NOCMA’s compliance to the cabal’s ill-agenda or frustrate the normal process with an intention of creating fuel crisis that would throw the government in high proportional chaos. The cabal was positioned to marvel in such a chaos for they estimated it to cause the genesis of mass discontent against the administration and throw the leadership into a desperate mode. Satanic ideation if you ask me!
Among other moves, MERA declined to approve NOCMA’s 2021 to 2022 application to award contracts to Independent Petroleum Group (IPG) and Lake Oil Limited which were selected by NOCMA’s procedural selection process. The reason that MERA advanced in denying this approval was that the application submitted by NOCMA was on the premiums stipulated under NOCMA’s Delivered Duty Unpaid (DDU) which in MERA’s view were not competitive and not transparent. MERA said that NOCMA should use what is called ex-tank incoterm. The DDU and EX-TANK terms are explained at the endnote. Surprisingly, it is the same MERA which approved the DDU method to be used by NOCMA since 2017.
That was not the only axe which MERA purported to grind. It threatened NOCMA that it won’t be provided with Price Stabilization Fund (PSF) which, by law, NOCMA and all other licensed fuel importers qualify and are entitled to receive from MERA. As to why MERA was so determined to punish NOCMA using every means at its disposal, the answer has selfish interests on its linear curve. By the way, the amount of the PSF is 0.5% of the total procured volume and records show that NOCMA does not claim it after all!
In the circumstances, NOCMA’s hands were surely tied from proceeding with the award of the supply contracts. In the meantime, the country was only relying on NOCMA’s own importation which is, by law, only 50% of the total required import volumes. Eight months down the line, this scenario presented a fuel crisis threat which prompted NOCMA to seek special permission from other governing institutions to proceed with the contracts award. Accordingly, the Parliamentary Committee on Natural Resources and Climate Change echoed the approvals from Public Procurement and Disposal of Assets (PPDA) issued on 23rd March 2021; the ACB and Government Contracting Unit issued on 21st April 2021 as well as the Ministry of Justice. Sadly, perhaps unaware of the corrupt and ill-agenda of the cabal, the new ACB Director Martha Chizuma issued a restriction order on 8th June against NOCMA’s process to award the fuel supply contract. As to how the projected fuel crisis has not yet visited Malawi, we can only admire the miracles that NOCMA has created so far.
SUGGESTIONS
Since it is by law (or is it policy?) that NOCMA should be importing 50% of the liquid fuel and the other 50% be imported by private importers, we, at Shire Times, strongly echo the sentiments by the Parliamentary Committee on Natural Resources and Climate Change that:
- Fuel is strategic national commodity and that as such it should be conveniently controlled by a government agency (in this case NOCMA) and not to be put in the hands of private companies.
- The Ministry of Energy should review the 50-50 arrangement on fuel importation between NOCMA and private importers. The Parliamentary Committee on Natural Resources and Climate Change should strategize on bringing a Bill aimed at revising the existing energy laws with a strategic target to allow NOCMA to have a responsibility of importing 90% and the 10% be given to private importers.
- NOCMA should have the mandate and responsibility to sell liquid fuel to consumers in order to optimize its operations and sustainability.
END NOTE: TERMS EXPLAINED
DDU: Delivered Duty Unpaid is an international trade term which refers to a trade arrangement in which a seller (in this case the supplier) is responsible for shipping and safe delivery of goods (in this case the fuel) to the buyer (in this case NOCMA) to an agreed destination (in this case at NOCMA’s reserve deports), paying all transportation expenses and assuming all risks (such as hijacks, accidents, etc) during transportation.
EX-TANK: This is an international commerce term (incoterm) in which delivery of goods (in this case the oil) by the seller (in this case the supplier) to the buyer (in this case NOCMA) is done at the storage tank designated by the seller. The buyer becomes responsible for all the costs and risks involved in transporting the goods to their destination.
