Consumers Association of Malawi (Cama) executive director John Kapito has written President Joyce Banda, demanding an explanation on how resources from the donated crude oil from Nigeria have been used.
Kapito in a letter addressed to Chief Secretary Hawa Ndilowe dated January 7 2014, which The Nation has sourced, says the Nigerian Government through its President Goodluck Jonathan donated crude oil to Malawi when he visited the country last year.
Office of the President and Cabinet (OPC) spokesperson Arthur Chipenda said OPC had not yet received Kapito’s letter, but was ready to provide information if given enough time.
Said Kapito: “We strongly believe that Malawians are entitled to know how government uses any donation received on their behalf and how such donations contribute to their livelihoods. The donation was for Malawians and it is important for the incumbent government to explain and inform the public on how such a donation has been used.”
He asserted that a memorandum of understanding (MoU) between Malawi and Nigeria was signed by Jonathan and Banda.
He added that the Nigerian Government promised to donate and supply the country with crude oil to alleviate the economic challenges the country was experiencing at that time.
“The Consumers Association of Malawi has in the past months made several inquiries with the ministries of Finance and Energy on how the proceeds from the crude oil were used by Malawi, bearing in mind that during the same period consumers experienced high petroleum prices despite the crude oil donation from Nigeria, unfortunately the two ministries have not responded to our inquiries.
“We are, therefore, requesting the President through the Office of the President and Cabinet to inform Malawians on the proceeds from that donation and how those resources were used to address the economic challenges faced by Malawians knowing fully that the President was also a signatory to the memorandum of understanding and a self-proclaimed champion against corruption in Malawi,” said Kapito in the statement.
But said Chipenda : “The OPC is ready to provide detailed information, if accorded sufficient time, on how the arrangement has been operating. I will be ready to do so by Friday, January 10 2013.”
In April last year, Weekend Nation carried a story detailing how the State House had dragged the country into a crude oil contract with a Nigerian firm that could be costly for the already troubled economy.
The government-to-government deal, signed between the Republic of Malawi and the State-owned Nigerian National Petroleum Corporation (NNPC) on May 16 2012, but which came into effect on May 1 2012; expired on April 30 2013.
According to the contract, before making the first uplift of the oil, Malawi as a buyer agreed to pay upfront $2.5 million (over K1 billion).
At issue was the manner in which State House handled the contract given that this was a highly technical matter; the lack of a clear cost-benefit analysis for Malawi in the deal and the legal pitfalls government could find itself in at the closure of the one-year contract.
investigations showed that to facilitate the deal, President Banda gave Michael Anyiam-Osigwe—who she had earlier appointed as Malawi’s Honorary Consul-General to Nigeria—authority to sign the multi-million dollar crude oil deal on behalf of Malawi, before involving relevant government technocrats.
The paper found out that Anyiam-Osigwe—a member of one of Nigeria’s wealthiest families—went ahead and enlisted PDG—a company run by his relation Raymond Anyiam-Osigwe—to act as the agent in return for some unspecified payment of royalties.
Under the arrangement, Nigeria agreed to supply Malawi with crude oil through the NNPC and allowed Malawi to either process or sell the crude oil.