ADMARC Buying Fuel? Questions rise over Admarc $323 Million Fuel Loan Amid Concerns of Mismanagement
Struggling state-owned Agriculture Development and Marketing Corporation (ADMARC) has secured a controversial $323 million (about K650 billion) loan facility to procure 180 million liters of fuel, a deal that could burden Malawian taxpayers with a 26-year debt.
Documents obtained by the Platform for Investigative Journalism (PIJ) reveal that ADMARC secured the loan from HG Global, a South African company claiming to specialize in infrastructure financing, to procure fuel on behalf of the National Oil Company of Malawi (NOCMA). The arrangement ties into a five-year, $1 billion Chinese tobacco market deal involving Malawi supplying 55,000 tons of tobacco annually under a memorandum of understanding with China’s Hunan Zhongxian La Wei International Trade Limited.
The loan, reportedly intended to cover two months of petrol and four months of diesel supply, bypassed NOCMA’s traditional role in national fuel procurement. ADMARC denies any fuel was purchased, but documents show advanced procurement plans involving multiple subcontractors, including Malawi-based Agro Africa Trade and Alleluia Enterprises, as well as Zambia’s Green Global Commodities and Baraqah Limited.
The deal raises legal and governance concerns. Critics point to a violation of Malawi’s Public Procurement Act, which mandates International Competitive Bidding (ICB) for contracts exceeding K10 billion. The $323 million agreement, which sidestepped ICB requirements, adds to the troubling trend of opaque fuel procurement deals.
Under the terms of the loan, repayment spans 25 years at a 0.5% annual interest rate. Funds are to be recouped from In-Bond Landed Costs, subtracting various logistical expenses, yet governance analysts have questioned the economic sustainability of such an arrangement.
Documents also expose overlapping corporate connections involving Roger Charles Groenewald, who represented three subcontractors in the deal. Agro Africa Trade and Alleluia Enterprises share adjacent addresses in Lilongwe, raising further doubts about the integrity of the parties involved.
ADMARC’s CEO Daniel Makata communicated with NOCMA about the agreement in September 2023, but both ADMARC and NOCMA have since denied any involvement in the fuel purchase. Despite substantial evidence, ADMARC spokesperson Theresa Chapulapula dismissed the allegations, stating, “We did not purchase any fuel.”
Adding to the controversy, HG Global’s operations in Malawi have a history of unfulfilled promises. The company previously proposed ambitious $12.7 billion infrastructure projects, including stabilizing the energy grid and upgrading airports, but none materialized.
Governance experts, including Centre for Human Rights and Rehabilitation (CHRR) Executive Director Michael Kaiyatsa, have criticized the use of ADMARC for such a high-risk deal, warning it could further jeopardize the struggling parastatal and deepen Malawi’s economic woes.
“This reliance on long-term loans for essential commodities reflects poor planning and mismanagement. Fuel procurement should be transparent and accountable, given its vital role in the economy,” Kaiyatsa said.
Governance analyst Wales Chigwenembe compared the deal to previous scandals, including the misuse of the Affordable Inputs Program. “The government’s failure to establish robust oversight mechanisms enables these patterns of abuse. Proactive communication and transparency are essential,” he said.
Parliament recently amended procurement laws to allow any government entity to procure fuel, a move opposition MPs have warned could open the door to further corruption.
For Malawians, the ADMARC-HG Global deal underscores the persistent challenges of governance, transparency, and accountability in public institutions. As investigations unfold, the case has become a litmus test for the government’s commitment to reform.
This article was produced by the Platform for Investigative Journalism (PIJ), a non-profit center for investigative reporting.
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