…leave fuel for 11 days at port, want transport bribes
..MERA boss Kachaje flown by fuel supplier to Dubai
Malawi Energy Regulatory Authority (MERA) Chief Executive Henry Kachaje was flown to Dubai by Addax Petroleum, where he aimed to organize a meeting with President Lazarus Chakwera to convince him to reconsider the government-to-government agreement for fuel procurement from petroleum refineries, as reported by The Investigator Magazine.
Kachaje, together with his counterpart at the National Oil Company, Clement Kanyama, was aided by Secretary to the President and Cabinet Colleen Zamba and a cabinet minister (whose name is currently undisclosed) in a scheme to obstruct the transportation of fuel that had arrived at Tanga port in Tanzania on December 27, 2024. This was done to support their assertion that the agreement would not be successful.
Kanyama and Kachaje, who appeared before the parliamentary energy committee on Friday, inaccurately stated that they did not have the necessary trucks to transport fuel to Malawi. In truth, NOCMA was intentionally causing delays to exacerbate the crisis, to sabotage the recently established supply chain that provides fuel at a price $89/ton (K300,000) cheaper than the traditional suppliers who are withholding the product.
On Friday morning, Kachaje falsely informed the parliamentary committee that NOCMA lacked transportation for the fuel acquired in mid-December. According to local transporters, this is seen as an effort to opt for foreign transporters, which could result in a cost of K30 billion (US$9.7 million) to the country, instead of using local truckers who would only be paid K17 billion in the local currency. Additionally, he falsely stated that local transporters lack the necessary capacity.
The President seems incapable of effectively managing or halting corruption in fuel procurement due to allegations that some of his family members are receiving kickbacks from fuel suppliers.
Suppliers who paid “tithe” want G2G stopped
Corruption, rather than a lack of foreign exchange, is the primary reason for the fuel shortages. The NOCMA systems have been plagued by corrupt procurement practices, such as insider trading, kickbacks, and commissions reaching as high as US$100,000 per month to politicians and government officials at various institutions including the State House, OPC, NOCMA, Ministry of Energy, and most recently MERA.
Three factions are vying for control over fuel procurement: the recently formed group assembled by the President, consisting of advisory, ministerial, and technical teams; the existing procurement team led by SPC Zamba, who also chairs the NOCMA; and a group of politicians with close ties to the president’s family.
To reach a compromise, the fuel supply system of three out of the current six suppliers was connected to the President’s family camp, whereas the remaining suppliers were associated with the OPC-NOCMA camp. This arrangement led to suppliers from the SPC-NOCMA camp being given priority over others. Regrettably, the President’s family camp, which has the most extensive supply chain, halted deliveries due to payment issues.
In September, Dr. Wilson Banda, who was then the Governor of the Reserve Bank of Malawi, raised concerns to the President about more than US$15 million in cash that had been allocated to NOCMA for supplier payments, yet none had been disbursed. The report, as per insiders, likely played a role in Dr. Banda’s removal from the Bank, as he apparently crossed powerful factions that influenced President Chakwera.
The new team, consisting of Pastor Zach Kawalala and Hellen Buluma in advisory roles, along with unconfirmed reports of First Lady Monica Chakwera’s participation in one of the committees, has proposed the G2G model as a more cost-effective means of obtaining fuel from refineries compared to utilising intermediaries.
G2G faces resistance from OPC/NOCMA
The Ministerial team, under the leadership of Minister of Energy Ibrahim Matola, proposed the G2G approach and arranged for the President to travel to Dubai to commence discussions with the Emiratis about possible supply opportunities.
The model offers dependable and cost-effective fuel; nevertheless, the Kenyan Government has indicated that it is considering discontinuing the model because it has not yielded the expected results.
The Investigator Magazine revealed that before proposing the idea, Secretary for Energy Alfonso Chikuni and NOCMA’s Kanyama travelled to Kenya to assess the model. After finding no benefits, they criticised the system in their report, which will be highlighted in our forthcoming story.
The SPC members Zamba, Chikuni, Kanyama, and Kachaje are part of the fuel teams established by the President. Despite this, they appear dissatisfied with the setup, as NOCMA promptly alleged being excluded from the new arrangement right after its announcement.
A media campaign that was paid for continued to undermine the system while the team focused on distributing fuel, with others determined to prevent it no matter what. The team has now integrated transportation into the process of obtaining bribes.
Dubai trip, Kachaje takes Addax team to Chakwera
The MERA boss, who was not included in the delegation list, travelled to Abu Dhabi in an attempt to organize a meeting between Addax and President Chakwera. There is uncertainty from conflicting sources regarding whether the meeting actually occurred.
Addax paid for the MERA CEO’s fuel and accommodation expenses during the Dubai trip, where the CEO did not attend any presidential events. Instead, the CEO’s visit was solely to promote Addax and another supplier.
According to our source at MERA, it is claimed that Henry Kachaje and Clement Kanyama have a personal interest in upholding the current fuel supply system with two preferred suppliers. This is primarily because they benefit personally from the intermediary process. The informant also clarified that the trip was not funded using MERA accounts.
When the President announced the policy shift to G2G, an invitation was promptly extended to one of the suppliers, Addax, to visit Malawi and meet with the President and other officials to advocate for maintaining the current system. Despite multiple attempts, a meeting with the President could not be arranged. Subsequently, the President travelled to Abu Dhabi to negotiate a deal for direct fuel imports from UAE refineries, according to a source at OPC. The source also disclosed that although Kanyama and Kachaje were actively involved, the true influential figure behind them was widely acknowledged.
“We have confirmed that the supplier managed to cover all of their expenses while in Dubai. They were accompanied by a party that purported to represent an oil-producing company from a different country. Together, they conspired to undermine the deal in the UAE,” disclosed a separate source.
The Investigator Magazine can disclose, based on information from four reliable sources, that the President was presented with a deal in which Addax would procure fuel from ARMCO in Saudi Arabia.
According to government officials, the initial effort to procure fuel from ARMCO was disrupted when the Badea Fund provided a $50 million loan for fuel supply. NOCMA was presented with a form to request a direct supply but did not take any action, as receiving a direct supply would reduce the kickbacks they are currently obtaining.
“According to another source, Kachaje and Addax were present to persuade the President that the supplier would act as an intermediary between NOCMA and the specific government.”
G2G emergency fuel is cheaper than the current contract supplier
The Ministerial fuel team bought fuel in early December 2024, as per the agreement with the Kenyan government, to tackle the shortages resulting from NOCMA suppliers holding back the commodity due to delayed payments.
The data presented in The Investigator Magazine shows that Hass is selling diesel for US$273 per ton and petrol for US$255 per ton. In contrast, The Addax is offering diesel at US$215 and petrol at US$225.
The emergency fuel acquired via G2G procurement was delivered at a reduced price of US$184, leading to savings of $89/MT for diesel and US$194 for petrol, saving the country $61/MT compared to NOCMA’s existing suppliers. This indicates that Malawians have been receiving disadvantageous terms for an extended period.
“The ability to buy directly from Dubai or Abu Dhabi at reduced prices could help in stabilizing and potentially lowering fuel expenses. Nevertheless, it is unexpected that certain groups are against this method,” as per another source, suggesting that those who are against the new system are actually profiting from corruption by earning additional charges on the inflated prices set by their suppliers.”
Fuel dumped at Tanga for 11 days, NOCMA fails to mobilise transport
50 million litres of fuel, acquired through emergency measures, arrived at Tanga port on December 27, 2024. Energy Minister Ibrahim Matola smiled and announced to a nation tired of waiting in fuel queues that the problem was finally resolved, thanks to a new mandate given to him by the President.
Officials from the Ministry of Energy, OPC, NOCMA, and MERA had different intentions. They delayed sending out trucks to collect the fuel for 11 days before finally dispatching the initial trucks to gather the essential commodity. As inquiries arose regarding the fuel’s whereabouts, NOCMA released an advertisement on Thursday, January 9th – the very day Matola had anticipated the fuel situation would begin to improve.
The cartel pelted eggs at Matola, the President, and all Malawians, fully aware that no consequences would follow. The President’s lack of action indicates his weakness, allowing the fuel control cartel to function as the de facto leader of Malawi. President Chakwera, despite his statements, has been reduced to a puppet.
The cartel refuses to relinquish control of fuel transportation, aiming to instigate panic and rely heavily on their Tanzanian fleet, which costs a staggering US$ 9.8 million compared to local trucks.
“With the updated prices for transporting goods from Tanga to Lilongwe, Malawian trucks will be paid in kwacha, ensuring no foreign exchange loss. They will receive K349.93 per litre for a total of 50,850,000 litres, amounting to K17,793,940. For foreign trucks, the payment will be US$9,885,522 in foreign currency. This sum is sufficient to purchase extra fuel for 300 trucks to last through February. A prominent transporter mentioned that the President may need to step in personally as these cartels are a serious matter.”
Pure sabotage, only Chakwera knows why these officials are in office
The fuel that arrived in Tanga was cleared and unloaded by December 30th, which is more than four weeks after the emergency procurement took place. However, NOCMA officials failed to arrange transportation, which disrupted the supply chain.
“They were preoccupied with searching for a justification to halt fuel supply. The President has been notified. The real question is why he is not taking action to spare Malawians the suffering of enduring fuel shortages even during the holiday season. Farmers are unable to transport fertilizers, ambulances are not operational. Is Malawi being led by a President or a mere puppet of certain mafia figures?” inquired a frustrated transporter.
There have been claims that representatives from NOCMA and MERA have been reaching out to individuals, advising them not to transport fuel from Tanga, promising contracts as a reward. This deliberate act of sabotage was verified by two transporters in Lilongwe.
Kachaje claimed that Malawian transporters lack the ability to transport the fuel, a statement that was strongly refuted by the Transporters Association of Malawi. According to them, NOCMA does not have formal contracts with any transporter; instead, they rely on ad-hoc contracting, which is susceptible to misuse, theft, and corruption.
“We have dispatched 180 trucks to transport the initial shipment, Tanga presents more challenges. The subsequent fuel can be routed through the Malawi Cargo Centre in Dar es Salaam, Nacala, or Beira, as they remain unaffected by the ongoing riots in Mozambique. The Malawi Cargo Centre would utilize trains to reach Mbeya and Nacala, allowing us to transport all of it within one and a half weeks. Due to distance and logistical considerations, Tanga may require more time. Any claims suggesting otherwise are aimed at sabotage, not conveying the truth,” stated an official speaking off the record.
In our upcoming second series next week, we will delve into the key players in the fuel industry, the companies involved, instances of bribery, and the mechanisms through which they influence the fuel supply in Malawi.
Editors View: Why does Chakwera fail to act?
The President’s last experience of queuing for anything was likely before he entered politics. It is challenging for those who are not directly affected to comprehend the suffering that Malawians are enduring due to the lack of fuel, electricity shortages, and the increasing cost of living. President Chakwera’s suggestion that farmers should sell two bags of maize to buy one bag of fertilizer is viewed as nonsensical. He appears to be suffering from political forgetfulness, as he seems to have overlooked the fact that he declared a state of disaster when five million people were without food. Despite this, he expects them to produce maize and purchase fertilizer. His inability to take action or recall his previous statements is evident. The President’s leadership appears disoriented, with indications that he may not be actively engaged in his duties. The country seems to be under the control of his associates and acquaintances, who prioritize personal gain over the well-being of the nation. This situation is distressing, especially considering the numerous reports of misconduct by his appointees, which he seems to ignore. The lack of coherence, strategy, and action in his leadership has led to the deterioration of Malawi’s economy, resulting in the devaluation of the Malawi kwacha and pushing the population into a state of poverty. Under President Chakwera, corruption and theft prevail, while the citizens continue to suffer. There are doubts about whether he will address issues such as fuel sabotage, raising suspicions about his potential involvement in such activities.
