Govt Unaware of East Bridge Guarantee as Malawi Faces K57 Billion Fertiliser Claim and Possible Asset Seizures Abroad

Minister of Finance Joseph Mwanamvekha says his ministry is not aware of any sovereign guarantees linked to a controversial fertiliser deal with Romanian firm East Bridge Estate SRL, even as the company has issued Malawi a 10-day ultimatum to pay $32.6 million (about K57 billion).

Mwanamvekha’s remarks come at a time when Malawi is facing mounting legal pressure over a deal that critics say reflects a series of questionable decisions made under the administration of former president Lazarus Chakwera and the Malawi Congress Party government.

In an interview, Mwanamvekha distanced his ministry from the dispute, saying it had no knowledge of the guarantees or the looming legal action.

“As the Ministry of Finance, we are not aware of the guarantee, and we are not aware that they intend to go to court,” he said.

However, East Bridge has already escalated the matter. In a notice dated February 24, the company, through Kalekeni Kaphale Lawyers, gave the Malawi Government until March 10, 2026 to settle the claim.

The company has also informed the International Chamber of Commerce that it is commencing arbitration proceedings in Nairobi, Kenya.

In its notice, East Bridge warned that failure to pay the claim would trigger enforcement of two sovereign guarantees allegedly issued in May 2023 and could lead to the seizure of Malawi Government assets in countries such as the United Kingdom, the United States and South Africa.

Arrests and corruption probe

The dispute has already drawn corruption investigations.

Authorities recently arrested former Cabinet ministers Sam Kawale and Sosten Gwengwe, alongside former Secretary to the President and Cabinet Colleen Zamba, over their alleged roles in the East Bridge transactions.

The three face charges of conspiracy to commit a crime and abuse of office.

Meanwhile, the Anti-Corruption Bureau has restricted the export of tobacco linked to East Bridge as part of its investigations into contracts involving fertiliser, soya beans and tobacco.

Through a restriction notice issued on January 26, the bureau stopped Mediterranean Shipping Company from exporting tobacco belonging to three East Bridge-linked companies.

Acting ACB Director General Gabriel Chembezi said the tobacco is central to investigations into whether the Ministry of Agriculture entered into the deal without following procurement procedures.

Preliminary findings suggest the restricted tobacco was purchased using about K45.5 billion in public funds.

Chembezi said AHL Tobacco Sales Limited had to step in and pay growers on behalf of East Bridge to prevent unrest among farmers demanding their payments.

“It is not true that the ACB would like to frustrate a commercial contract because the ACB is simply fulfilling its mandate of investigating and prosecuting corrupt practices,” he said.

East Bridge claims political interference

But East Bridge representative Haim Tzutziashvili has accused political factions of interfering with the company’s operations.

He said 17 containers of tobacco belonging to East Bridge, valued at about $7 million, are already loaded for export but remain blocked.

The company is demanding $23.2 million for 28,075 metric tonnes of fertiliser delivered in May 2024, which it claims has remained unpaid for more than 21 months.

However, Smallholder Farmers Fertiliser Revolving Fund of Malawi (SFFRFM) has rejected the claim.

In a written response, acting chief executive officer Master Gadama said the institution does not owe the company any money and insisted that there are no sovereign guarantees in place.

A deal that sparked controversy

The dispute traces back to 2023, when the Malawi Government entered into an agreement with East Bridge to supply about 600,000 metric tonnes of fertiliser in exchange for agricultural produce.

From the outset, the arrangement raised alarm among governance activists who questioned whether the government had bypassed procurement laws.

Now, with arbitration looming and Malawi potentially facing asset seizures abroad, the fallout from the controversial fertiliser deal is increasingly being viewed as another costly example of how poor policy decisions and opaque contracts made under the MCP administration are continuing to haunt the country’s economy.

Follow and Subscribe Nyasa TV :