Government has quietly shelved a controversial fuel supply deal which Secretary to the President and Cabinet, Colleen Zamba, who is also Nocma’s Board Chairperson, facilitated.
In the deal, a “ruler” from the United Arab Emirates (UAE) named Sheikh Ahmed Bin Faisal Al Qassimi would supply 250,000 metric tons of fuel.
Malawi would pay for the fuel in Kwacha.
The deal came with fanfare, with the Nocma (National Oil Company of Malawi) CEO, Clement Kanyama, assuring the nation that the Sheikh was one of the legitimate ‘rulers’ in the UAE. He even said Malawi government and the office of the ‘ruler’ negotiated the deal.
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On November 27, 2024 President Lazarus Chakwera announced that his administration had decided to begin the process of transitioning Malawi from the Open Tender System for procuring fuel to a government-to-government arrangement.
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He said this would make access to fuel more secure through better payment terms and cycles.
Chakwera further announced that he had constituted a committee to facilitate and execute all aspects of this policy.
Minister of Energy would chair the committee which would comprise a technical team of technocrats from respective ministries to work with the committee to speed up securing of the first G-to-G agreements.
Given Malawi’s struggle to procure foreign exchange for fuel imports, and considering the Sheikh’s offer of fuel assistance payable in Malawian Kwacha, particularly given his position as a ruler in the UAE, Malawi could have been eager to embrace this deal as part of the G-to-G arrangement.
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That, however, is not the case. A source within the taskforce on fuel procurement has told Malawi News that revealed that the Sheikh deal isn’t on the list.
“I can confirm that the deal is not on our table. In the UAE, the President and the taskforce are engaging the UAE government directly through the UAE leadership, whom the President met when he visited,” the source said.
The final nail in the coffin for the Sheikh’s deal came from the Malawi Energy Regulatory Authority (Mera).
In a memo to Nocma, Mera revoked its previous resolution, citing concerns about the fuel supply situation, rising pump prices and growing under-recoveries.
The memo, dated October 11, 2024, emphasised that the Sheikh’s deal conflicted with Mera’s ongoing review of the fuel importation and pricing structure.
“I would like to advise that after a careful review of the critical aspects of the fuel supply situation, prevailing pump prices, growing under-recoveries, associated fuel importation costs whilst considering end-user interests, the Authority hereby revokes the said resolution.
“Nocma is therefore prohibited from proceeding with the said tendering and procurement effective immediately, until a subsequent resolution from the Authority at the conclusion of its further reviews on the matter,” reads the letter which Mera CEO Henry Kachaje signed.
During Chakwera’s recent trip to the UAE last month, the said Sheikh was not on his itinerary, raising questions about the future and the legitimacy of the initial deal.
“You can see the President travelled to the UAE where he only met UAE leader and UAE’s Minister of Investment and Group Chief Executive Officer of Abu Dhabi Holdings. He did not meet with the said Sheikh and he was not on his programme.
“If the Sheikh really wanted to help Malawians as we were told by Nocma’s Chief Executive Officer during the press conference he held in Lilongwe in September last year, then why wasn’t he on the President’s menu when he went to UAE?” Wondered the source.
In September, Nocma told journalists in Lilongwe that it followed all due processes.
The PPDA [Public Procurement and Disposal of Assets Authority] refused to grant a No-Objection asking Nocma to comply with some single sourcing conditions.
The Nocma Board was working on implementing the recommendations from PPDA before Mera blocked the deal again.
We asked Kanyama why Mera prohibited Nocma from proceeding with the Sheikh deal and why the Presidential taskforce on fuel supply is not pursuing it despite the national oil company assuring Malawians about the authenticity of the said Sheikh.
“HE [His Excellency] announced establishment of Government Coordination Committee, as a structure to work on returning country to normalcy with regards to fuel supply security. Its Secretariat is Mera. Please engage Mera,” Kanyama said.
Kachaje could not directly address our question about the status of the Sheikh deal.
