Malawi stalls probe on suspicious oil contracts
MALAWI’S graft-busting body, the Anti-Corruption Bureau (ACB), has stalled investigations on suspicious donations that were allegedly made to former president Joyce’s Banda’s Mudzi Transformation in exchange for the controversial awarding of exploration licences for oil blocks.
ACB is putting its foot down, saying it has no money. This despite having had a raise in the 2017/18 fiscal budget.
“The investigations have stalled due to insufficient resources and legal processes that are required to follow some links both within the country and in other jurisdictions outside the country,” ACB’s senior publicist Egrita Ndala said.
But the Natural Resources Justice Network, a coalition of civil society organisations (CSOs) working in the extractive sector, is having none of it.
“We want to call on the government to make transparent the process around the renegotiations of the addendum to the oil and gas agreements and to allow corruptions investigations to be concluded,” said the network’s chairperson Kossam Munthali.
In May, ACB said it had launched an investigation into whether money irregularly changed hands during the rushed signing of production-sharing agreements on three of Malawi’s petroleum blocks eight days before the 2014 elections.
The probe was requested by a range of Malawian civil society organisations and international NGO Oxfam.
“The Anti-Corruption Bureau has been allocated a budget estimate amounting to $4 million in the 2017/18 budget. Of this, $1.5m is for personal emoluments while $2m is for corruption prevention, public education, investigations and prosecutions,” Ndala said.
She said ACB did not only require financial resources to operate effectively, but also needed well-trained personnel, enough vehicles and other relevant equipment which was necessary for it to carry out its operations.
The awarding of six petroleum exploration licences between 2012 and 2014, under the former presidencies of Bingu wa Mutharika and Banda, was fraught with controversy.
Less than two weeks before the hotly contested elections in May 2014, Banda’s government entered production-sharing agreements with Rak Gas MB45 – a subsidiary of the United Arab Emirates’ state-owned Rak Gas registered in the secrecy jurisdiction of the Cayman Islands. The deal was reached before any proven oil discoveries.
According to records of the Reserve Bank of Malawi, Rak Gas made an unexplained payment of $235 700 (89m Malawi kwacha) to the Reserve Bank’s account for the government’s mines department before the exploration licences were handed out.
The unusual wire transfer was picked up and queried by independent consultants LBN Strategies of Cologne, Germany, and Lilongwe-based Resources M&E while examining the Reserve Bank’s accounts as part of a scoping exercise for the government.
In 2015, the Extractive Industries Transparency Initiative (Eiti) Board, which met in Bern, Switzerland, unanimously approved Malawi’s application to join the Eiti, a development that means Malawi’s natural resources will be stewarded with global standards of transparency and accountability.
Paradoxically, the country’s first Eiti report launched in Lilongwe this week showed that 34% of the total revenue paid to the government could not be accounted for.
According to the report, $700 000 from the Department of Mines revenue and almost $2m from Malawi Revenue Authority has not been reconciled from a total of $8m the government declared.