Minister of Energy Ibrahim Matola has described as “shameful” Malawi’s failure to fully utilise port facilities offered by Tanzania in Dar es Salaam and Mbeya to facilitate imports and exports as well as transport costs.
In his address to members of the Parliamentary Committee on Natural Resources and Climate Change as well as Malawi Cargo Centres (MCC) Limited and National Oil Company of Malawi (Nocma) staff at Holiday Inn in Dar es Salaam, Tanzania, on Friday, the minister said the cargo centre is a great asset for Malawi which has sadly not benefitted the country in recent years.
He said: “It will be very embarrassing to lose the facility due to lack of care and usage. The fuel tanks farm here is of great value for Malawi, especially at this particular time when there is a global fuel crisis.
“It’s very shameful… If our forefathers woke up from the grave to find the state the facilities are in, they will be very disappointed. This was a dream of pan-Africanists like [Malawi’s founding president] Hastings Kamuzu Banda, Mwalimu Julius Nyerere [of Tanzania]. The likes of Mzee Jomo Kenyatta [of Kenya] and Kwame Nkrumah of Ghana.”
Tanzania allocated a piece of land to Malawi in Dar es Salaam to facilitate imports and exports under what was called the Northern Corridor in the face of a civil war in Mozambique which disrupted Malawi’s access to the Indian Ocean ports of Nacala and Beira.
Kamuzu commissioned the Malawi Cargo Centre facilities on October 4 1991 during a State Visit to Tanzania.
However, over the years ownership of the facility has changed to the extent that the Malawi Government now holds 18 percent shareholding through Nocma which sits on the MCC Limited board. Bolloré Logistics is the current majority shareholder with a 47 percent stake while MCC Limited staff hold 6.9 percent of the shares and GSM Logistics is the other shareholder.
The Malawi Cargo Centre concept was designed in such a way that the cargo be moved from Dar es Salaam to Mbeya Dry Port, a distance of about 800 kilometres (km) by Tanzania-Zambia Railway Authority (Tazara) for ownward delivery by road to various points in Malawi.
However, over the years, the facilities have not been fully utilised. In 2019, MCC Limited operationalised the Mbeya Dry Port facilities to reduce the distance from Songwe on the border between Malawi and Tanzania to Dar es Salaam. Songwe is 120 km away from Mbeya and 1 000 km from Dar es Salaam.
During a visit to the Dar es Salaam facilities on Friday courtesy of Nocma, it emerged that the Malawi Cargo Centre is mostly handling cargo for other countries in the Southern Africa Development Community (Sadc), notably Zambia, the Democratic Republic of Congo (DRC) as well as Zimbabwe. The warehouse facilities were loaded with copper on the day.
Individual Malawians utilise the facilities mostly for clearance and storage of their imported second-hand vehicles.
In his remarks, MCC Limited managing director Patrick Jere said they decided to open the facilities to other countries because Malawians were not fully utilising the facilities.
He said the situation threatened the existence of the facilities as Tanzanian authorities planned to extend the Dar es Salaam port.
Jere appealed to Malawian businesses to give MCC Limited business instead of using other facilities.
He said the oil pipeline from the sea to the centre was in dire need of maintenance, having outlived its 20-year lifespan.
In her remarks, Nocma deputy chief executive officer Helen Buluma said the company invested $1.5 million in 2019 in the rehabilitation of the fuel tank farms.
She said Nocma wants to use the tanks as a buffer zone for fuel to avoid putting all eggs in one basket through its private suppliers.
Buluma said: “We need to have stocks in Dar es Salaam as well as Beira in Mozambique to create buffer zones amid the scramble for fuel due to the disruption in the global supply chains.”
She also asked Matola to intervene by engaging Ministry of Finance and Economic Affairs as well as Ministry of Transport and Public Infrastructure to facilitate a review of the arrangement to have Nocma exempted from paying storage fees.
Buluma also said Nocma wants its 41.5 million MCC Limited bailout converted into shares as a step towards regaining majority shareholding in the facilities.
Fuel tank farms at MCC Limited have a capacity of 20 million litres.
During the visit on Friday, the facilities were holding five million litres of petrol and 10 million litres diesel. Out of the diesel volume, 3.5 million litres were for Malawi and the rest for suppliers to the DRC and Rwanda.
Parliamentary Committee on Natural Resources and Climate Change chairperson Werani Chilenga echoed calls to have the Malawi Government reclaim full ownership of the facilities.
Malawi relies on its neighbours, most notably Mozambique and Tanzania, for access to the ports through both road and railway.
A United Nations Economic Report indicated that transport accounts for 56 percent of landed transport costs and 30 percent of import and export costs.