Malawi has cancelled a deal worth $145 million (about K58 billion) with Paramount Group, Africa’s largest private defence and aerospace firm, which signed deals with the Malawian government for agriculture, fuel and military contracts through a network of investment firms.
According to published report, government has cancelled the deal with Paramount Group, which was engaged, under the previous Joyce Banda administration, to supply military equipment to Malawi because it was “illegal and expensive.”
The Weekend Nation cited Minister of Finance, Goodall Gondwe, to have confirmed that “the agreement between the Malawi Government and Paramount Group has been abrogated.”
Malawi government is reported to have convened a meeting involving officials from Paramount Group and Gondwe, Governor of the Reserve Bank Charles Chuka and Attorney General Kalekeni Kaphale after noting legal pitfalls in the deal.
The newspaper report indicated that Malawi Government told Paramount Group during the meeting that the whole transaction was “illegal and unsustainable” and that the minister of finance was bypassed.
Under that agreement, Paramount Group was to supply wide-ranging equipment to establishments under the Malawi Defence Force. The total bill amounted to $145 million at the time, which under the current rate is about K58 billion.
Paramount also signed a deal with Malawi to provide seven interceptor boats to patrol Lake Malawi.
It is also linked to the sale of Malawi presidential jet, the Dassault Falcon 900EX which was bought by Bohnox Enterprises, a firm registered in the British Virgin Islands, and sent to South Africa, where it is loaned to VIPs by the jet company Fortune Air.
The newspaper report, citing unnamed source privy to the information likely the Finance Minister, said Malawi government would pay for the equipment that had already been delivered; $31 million (about K12.4 billion).
After the $15 million (about K6 billion) already paid through the jet sale, Malawi is remaining with about $16 million (about K6.4 billion) to pay.
Paramount Group is run by the South African brothers Ivor and Eric Ichikowitz and specialises in manufacturing armoured vehicles and unmanned aerial vehicles. It previously brokered a deal for the Malawian government to equip its peacekeeping troops in the Democratic Republic of Congo.
Trans Africa Capital, a venture capital firm run by Eric Ichikowitz, also signed agriculture and fuel contracts with Malawi’s government.Follow and Subscribe Nyasa TV :