An unadulterated verity on the ‘mysterious’ payment to Malawi govt related to oil, gas concessions

This article pops up in this popular e-news platform as a response to an article, Malawi: Mystery Payment to Malawi Govt Related to Oil, Gas Concessions by Collins Mtika which appeared in the same  forum on 22nd August, 2016.

Chimwemwe Chikusa Country manager for RAKGAS International Limited shakes hands with President Joyce Banda after donating medical supplies at Kamuzu Palace-pic by Stanly Makuti.

Chimwemwe Chikusa Country manager for RAKGAS International Limited shakes hands with former president Joyce Banda after donating medical supplies at Kamuzu Palace-pic by Stanly Makuti.

In the article, Mr. Mtika alleged that RakGas Company, one of the oil and gas exploration concessionaires in Malawi, made a mysterious payment of $235,700 (89-million kwacha) to Malawi Government in April 2014, barely a month before the election that toppled our former state president, Her Excellency, Dr. Joyce Banda.

Mr. Mtika further explained that the “unusual’’ wire transfer of the ‘mysterious’ sum of money was picked up and queried by the twin consultants for the Natural Resources Justice Network, LBN Strategies of Cologne and Lilongwe-based Resources M&E, while examining the Reserve Bank’s accounts as part of the scoping exercise for government and that the network is currently demanding an explanation from Government on this issue.

As an avid reader of Mr. Mtika’s article and an investigative journalist at heart, I took my time to follow-up on the issue with the Ministry of Natural Resources, Energy and Mining  (MNREM) in order to unravel the gospel truth on the matter.

Through a detailed interview which I recently conducted with the top management in the Ministry, it has been established  that all the petroleum exploration companies, including RakGas,  which were granted licenses to explore for oil and gas in Malawi’s six demarcated blocks for petroleum exploration, were required by law to do the following as an inevitable obligation:

(i)  pay US$100,000 as license fee per petroleum block

(ii) pay ground rent which is MK500 per square kilometer

(iii) contribute MK7 Million to the Petroleum Training Fund (PTF) established in the Ministry for capacity building in the oil and gas sub-sector in the country, and,

(iv) spend not less than US$100,000 on Cooperate Social Responsibility (CSR) per year.

Noteworthy, CSR funds are used at community level and reported in the company’s annual reports which are submitted to MNREM through Department of Mines. Furthermore, MNREM, working hand-in-hand with relevant stakeholders, monitors the implementation of the CSR activities and also verifies what is reported by the companies.

I learnt from the interview that the exploration license fee is paid once in the project’s lifetime while the ground rent is paid annually and both payments are made to Malawi Government’s Account Number One (1) via Mines Department’s Revenue Account Number 0013006400001. However, the contribution to the PTF is made through a separate withholding account in the Reserve Bank which is further credited into an Operating Account in one of the commercial banks in Malawi.

As a keen and, indeed, passionate follower on the issue under investigation, I went further to establish as to whether the afore-mentioned payments were made to Malawi Government Account Number One by RakGas Oil Exploration Company. In my forensic investigation, I discovered that the sum of money amounting to US$235 700, wired through Mines Department’s Revenue Account number 0013006400001 held at Reserve Bank, was indeed paid by RakGas on 2nd April, 2014 to fulfill its license obligations, 8 months before Government issued a moratorium on all petroleum exploration license holders on 18th November, 2014.

The amount includes licence fees for blocks 4 and 5 (US$200 000) and ground rent (US$35 700).This amount is also reflected on Malawi Government’s receipt number GR593402, which MNREM issued to RakGas upon confirming the reflection of the payment in Malawi Government’s Account Number One via Mines Department’s Revenue Account.

From the investigation I carried out at Reserve Bank of Malawi, I learnt and confirmed that it is extremely difficult for someone at the Reserve Bank or elsewhere to divert the money, which has already reached the Government’s Account Number One, into their personal account. Thus, it would be extremely reckless, foolhardy and indeed shockingly impulsive for a reasonable person to engage themselves in such conspicuous malfeasance, which is extremely easy to track down.

Judging from the tone of Mr. Mtika’s article and connection of facts, one unequivocally pities the author for falling into the trap of some current immature and prodigal media propagandists who are spending sleepless nights to bruise the image of the mineral sector in Malawi as well as that of the past government of former president, Her Excellency, Dr. Joyce Banda. Dear reader, I am not a mineral sector sympathizer and neither am I Dr. Joyce Banda’s political admirer – no way! I am only putting facts right, unadulterated and straightforward to people who always yearn, search and settle for the gospel truth.

According to the professional canons of journalism, reporters are always expected to be as accurate as possible given the time allotted to story preparation and the space available, and to seek reliable sources. In this case, Mr. Collins Mtika was required at all cost to seek a comment from MNREM as one of the critically important key commentators on the alleged mysterious US$235 700 payment to Malawi Government innocently made by RakGas.

Fellow journalists, I implore you to stick to our professional ethics by always reporting nothing but the truth. Let us, at all cost, refrain from practising the weird journalism of cheap propaganda, mud-slinging and self-aggrandisement engendered by greedy masters, who strut in the night, like Biblical Nicodemus, to incite some gullible media practitioners to paint bad images of some well-meaning notables in our beautiful country, Malawi – The Warm Heart of Africa!

Fellow countrymen and women, together, we can develop our beautiful nation by building and strengthening the fervent, authentic and indeed Godly spirit of patriotism!

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