…his fight against Illovo earned him powerful enemies
…Chakwera met Illovo’s top brass in South Africa
…Parliament hid report on sugar inquiry
Simplex Chithyola Banda’s appointment notice came with additional paperwork, a full audit report during his time at Chinansi Foundation. The report was obtained last week, ahead of his appointment as Finance Minister leaked by senior Cabinet Ministers, an advisor to President Lazarus Chakwera, and circulated widely by members of the sugar cartel.
The Investigator Magazine has been informed of a full Cabinet reshuffle which could come as soon as this week and after the public lynching of Chithyola Banda, President Lazarus Chakwera has a perfect excuse to get rid of him.
The portfolio swap between Chithyola and Sosten Gwengwe could be short-lived, and the former Finance Minister is still attending IMF meetings in Morrocco, a strong indication that he might continue in the role soon after changes have been made. Chithyola arrived in Morrocco on Monday and his badge indicates that he is a mere delegate, and the technical teams are yet to recognise him as finance minister.
The sugar price war
Simplex Chithyola Banda in a statement on June 14 this year stunned Illovo Sugar Company, the dominant sugar maker with a 95 percent share of the market, when he ordered them to reduce the price of sugar within seven days or the ministry would give the licenses to new sugar importers.
The move, Chithyola Banda hoped would mitigate the soaring cost of living as industrial sugar was the main target, and reduction from the current K1.8 million per ton (US$1250) would see companies save and pass them, consumers.
Little did he know that sugar is literally controlled in Malawi and the price is higher inside the country than outside the country.
Illovo invoked its powerful backers including its Board Chairman Jimmy Lipunga, Presidential Advisor Chancellor Kafelapanjira, former President Bakili Muluzi, and then Minister of Finance Sosten Gwengwe who all wanted him to back down.
“Gwengwe chaired a meeting at Capital Hotel attended by Lipunga and Illovo Malawi Managing Director Lekani Katandula, which was supposed to reach an agreement on the impasse that ensued. The Minister was alone with everyone on the other side,” explained our government source.
Chithyola Banda is said to have been warned that he was “playing with fire” and that he should drop the sugar matter as it could lead to his firing from the cabinet.
Chakwera first refused, then later met Illovo in South Africa
The Investigator Magazine has been informed that President Lazarus Chakwera initially refused to meet Illovo Sugar’s South African-based Group Chief Executive Gavin Dalgleish who wanted him to intervene in the matter.
“The President said he was firmly behind his Minister and referred them to Chithyola,” explained our State House source, but Illovo did not want to meet Chithyola Banda who for weeks continued to stand up to the company whose issues including price transferring, taxes and exporting Malawi sugar through Zambia.
Using its influential network, Chithyola Banda was unceremoniously removed from President Lazarus Chakwera’s delegation to the SADC summit in Angola and the stop in South Africa.
“One Malawian who was around the Presidents hotel was Illovo’s Katandula and eventually on 23rd of August, President Chakwera in the absence of his Minister of Trade met the Illovo Group CEO Dalgleish,” said another person familiar with the matter.
The President is said to have had a “good meeting” and his Facebook post praised Illovo and pledged to work together to develop the Shire Valley Transformation Project.
Chithyola Banda’s removal from the delegation could have been telling and since then the Minister seemed to have backed down. His fellow Ministers who were in South Africa allegedly bad mouthed him to the President.
The Sugar cartel hits back, Rwandan Businessman deported
Chithyola Banda made good of his threat, and he issued two importation licenses to Mugisha Investments to import 20,000 tons of brown sugar, which Illovo cried foul saying would affect the local production.
Malawi sugar is overpriced and the Salima Sugar factory, which government owns 49 percent shares is riddled with ownership tussle, sugar controlled by a few and does not appear on the local market and an inquiry into K4 billion cash, one shareholder paid for his equity.
Immediately Mugisha owner got the license, the Immigration Department which is now being used to settle political scores, suddenly revoked the Business Resident Permit of Mugisha owner Ephrem Ngizwenayo and deported him to Rwanda.
“The deportation was done by Cabinet Ministers who have been doing the bidding of the sugar cartel. This was a warning to Chithyola Banda that he was playing with fire. They are determined that he should pay back at all costs,” said our source.
The cartel influence reached the cabinet and parliament which saw a whole sugar report disappear on the parliamentary order paper.
Parliament fails to table, adopt sugar report
Parliamentary Committee on Industry, Trade and Tourism held a two-day public inquiry in July on sugar production and pricing, after a civic group Centre for Democracy and Development Initiative (CDEDI) had demanded one.
CDEDI Executive Director Sylvester Namiwa said Chithyola Banda was a victim of “powerful cartels” who were using every opportunity to throw mud at him, and that parliament could not table the sugar report in the house.
“The sugar story will be told properly, we will continue with the fight,” challenged Namiwa.
Chairperson of the Parliamentary Committee Paul Dumembe Nkhoma confirmed in July that the report was ready, and it was supposed to be tabled before the whole house and be adopted by it.
“The report kept appearing and disappearing on the order paper. The Leader of the House Richard Chimwendo Banda seemed to be among those who were not interested in having it tabled. Even parliament has been captured as well,” said our source.
Is the swap, set up or real?
Chithyola Banda is not an economist or a finance person and his surprise appointment on Sunday raised political rumour mills to speculate the real reasons behind the swap.
Two theories have emerged- one that claims Gwengwe was being hounded by Secretary to the President and Cabinet Coleen Zamba to issue sovereign guarantees that he had to go, even as IMF Board is set to discuss the Malawi programme, the other being it was done to set up Chithyola Banda.
“If they fired Chithyola Banda, he would have been a formidable speaker outside government. But now with the public outcry engineered by the sugar cartel, the President has a good reason to get rid of Chithyola Banda without being seen as having been influenced by the sugar cartel” said our State House source.
The appointment of the new Finance Minister saw a three-year-old report emerge in which he was accused of having mismanaged about K60 million at his Chinansi Foundation.
“The report was literally attached to the appointment letter. It was well-organised and they knew about the impending cabinet changes. Since the appointments are done by the President, either he or the people that handle such information knew it would happen and they were trying to disgrace him,” said our political analyst
Chithyola Banda left Malawi on Sunday and he was in Morrocco on Monday where Gwengwe is also present. There are strong indications that President Chakwera might be considering sweeping cabinet changes.
The Investigator Magazine is withholding the Cabinet and Government Review as it was given a warning of impending cabinet changes and it is widely expected that Chithyola Banda could be in the new role for a few days.
“The skeletons have come out now for a purpose to whip public anger. This gives President Chakwera a valid excuse to remove him,” said our source.
SPC Zamba is said to have proposed the replacement of several Ministers and in some cases included technocrats to take over Ministries she has an interest in. We are yet to confirm the names for different Ministries but sources indicate that the SPC at one point wanted to be appointed Finance Minister.
Zamba and Chithyola Banda are both said to be close to the President, with the SPC having lived in South Africa as her father and President Chakwera were doing their theological studies and she used to live with the Chakwera’s..
“She is like a daughter. Chithyola Banda is thought to be a distant relation. How the reshuffle will pan out will indicate who has power and who wanted Chithyola Banda’s head,” said another senior politician.
Chithyola Banda, Gwengwe, and the Parliamentary Committee Chairperson could not be reached for comment.
Malawi Sugar War Part 2: Illovo’s price structure, double invoicing, and the taxes, the sad tale of Malawi’s sugar. Out on October 15, 2023.