Agents hold mw hostage

By Deogratias Mmana:

It is almost a tradition now – that the government does not seem it can procure anything directly from the producers.

Instead, it has to rely on some middlemen, local and international or both at the same time, to handle the procurement on its behalf.

And a number of cases where agents are involved have courted controversy.

Among analysts, heavy reliance on agents is effectively the institutionalisation of corruption and a systematic fleecing of taxpayers through bloated expenditures partly due to commission for the agents.

But the government has defended this practice, saying it is within the law.

In recent years, dobadobas—as the agents are called— have become fashionable in public procurement, driving government deals in fuel, fertiliser, drugs and medical equipment, construction materials and a range of other commodities.

Here are some examples all of which have stirred controversy:

Currently, Malawi is in the grip of flagrantly law-breaking fuel deal being controlled by Minister of Transport Jacob Hara and Secretary to the President and Cabinet Colleen Zamba.

In the deal, none of the two, however illegal their involvement, is dealing directly with the supplier, Trafigura.

Instead, they are working through at least three agents, local and international, and individual and corporate.

In another deal also hitting the headlines, National Oil Company of Malawi (Nocma) recently planned to procure fuel from United Arab Emirates through some ‘Sheikh’.

Last year, the government signed a deal with a firm known as East Bridge Estate Limited for the company to supply 600,000 metric tonnes of fertiliser in exchange for farm produce worth nearly K500 billion.

In 2022, the government also paid K750 million to UK’s Barkaat Foods Limited, which turned out to be a butchery, for the supply of fertiliser under the Affordable Inputs Programme.

The company was supposed to acquire the fertiliser from a globally-renown fertiliser producer, Yara Limited.

Barkaat terminated the contract after pocketing the money claiming it had lost the supply line with Yara UK.

It led to a protracted effort by the Attorney General to reclaim the money government had spent.

Between 2017 and 2021 the government entered into deals with a UK-based businessman Zuneth Sattar where it awarded 16 contracts worth over $150 million to his five companies for the supply of a range of material including military equipment.

The Catholic Commission for Justice and Peace said the use of dobadobas has become costly and emerged as a way of embracing corruption.

“The involvement of middlemen has often led to inflated costs in some procurements, as agents typically add a markup to the final price.

“This is particularly problematic in sectors like fuel and fertilizers where price sensitivity is high, and any cost increases are likely to affect ordinary Malawians,” said CCJP National Coordinator Boniface Chibwana.

According to Chibwana, in a country like Malawi, where most of the population lives in poverty, this is problematic as the cost burden is ultimately transferred to consumers.

Chibwana said the Public Procurement and Disposal of Assets Act (2017) is for fairness, adding that the law on middlemen in Malawi is increasing corruption.

“The law is made in such a way that it seeks to prevent price manipulation and corruption in public contracts. Given the notorious involvement of middlemen in corruption scandals, it is evident that intermediaries can compromise the integrity of procurement processes.

“Malawi’s anti-corruption laws also intersect with procurement laws, aiming to curb illicit practices such as bribery or the manipulation of tender processes,” Chibwana said.

Chairperson for the National Advocacy Platform Benedicto Kondowe said while the use of agents in public procurement can significantly enhance efficiency by utilizing their expertise, it also introduce additional costs, such as commissions and fees, which, if not carefully controlled, can erode the value for money.

“When agents are misaligned with procurement laws or improperly managed, these costs can outweigh the benefits, leading to inefficiency and inflated procurement expenses.

“Therefore, the role of agents must be carefully scrutinized to ensure their involvement delivers tangible value without compromising the cost-effectiveness of the procurement process,” Kondowe said.

He said Malawi’s Public Procurement Act and the Public Procurement and Disposal of Assets Act both emphasize transparency, accountability and value for money as key pillars of the procurement process.

“While the laws do not explicitly reference agents, they require that procurement methods foster competition, fairness, and efficiency. The improper use of agents risks violating these principles by reducing competition, increasing costs, and enabling opacity in procurement decisions,” Kondowe said.

He said if agents are not aligned with the legal standards, the integrity of the procurement process is undermined, potentially leading to unfair awarding of contracts, inflated costs, and reduced public trust in procurement outcomes.

Minister of Information Moses Kunkuyu said using agents is not against the law.

“Procurement laws recognize all those with legal ownership of goods and services as well as those with legal authorization to trade/distribute on behalf of others to do so,” he said.

He said the government, under different political administrations, has sourced goods and services from all cadres of sellers for decades.

“The government of Dr. Chakwera ensures that prescribed laws are followed in the process,” Kunkuyu said.