Malawi government set to renegotiate 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.
Finance Minister Goodall Gondwe said earlier it had cancelled the deal with Paramount Group, which was engaged, under the previous Joyce Banda administration, to supply military equipment to Malawi Defence Force because it was “illegal and expensive.”
But now government has revisited the issue and instead of cancelling, they will renegotiate, Attorney General Kelekeni Kaphale confirmed.
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 Kaphale after noting legal pitfalls in the deal.
Gondwe 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.
“ We will just renegotiate some of the contracts,” said Kaphale as quoted in the local press.
When Malawi cancelled the deal, Paramount Group released a statement, describing the termination of the contracts as untrue.
Under the contracts, Malawi was supposed to pay the supplier $5 million (K2 billion) quarterly.
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 :