By Winnie Atieno

The Mombasa County commissioner wants the use of the alternative currency known as Bangla-Pesa stopped.

County commissioner Evans Achoki said Bangla-Pesa is not the official medium of exchange.

“It is just barter trade and it should be discouraged. We are in the 21st century.

“How can people still engage in what was done centuries ago? It is inappropriate,” Mr Achoki said.

BOOST ECONOMY

Residents of Bangladesh, the largest slum in the county, have been using Bangla-Pesa as a complementary currency.

According to the Grassroots Economics website, Bangla-Pesa is a unit of credit that provides a means of payment that is complementary to official money.

As such, it helps to stabilize the community in the face of monetary volatility by allowing members of it network to trade with each other without using the national currency.

Launched in 2013, it is a non-profit initiative meant to bolster the economy of the informal settlements by organising small-scale enterprises into business networks, through which members can utilize a community currency to mediate trades.

BARTER TRADE

The residents have been using the currency printed in Germany to pay school fees, funeral expenses, and as church offering, among other uses.

Credits are issued in the form of paper vouchers as payment for goods and services.

The vouchers merely represent the goods and services of the business network, and come in denomination notes of five, 10, 20, 40 and 50.

A member is given a maximum of 400 Bangla-Pesa, of which 200 goes back to the community and is used in cleaning up the area.

Poisa Mwandawiro, an economist, has advised the users to push the government to accept it as an avenue for trading.

The initiative enables registered members to engage in barter trade with each other.

“According to the national status, we normally have a unified currency that is used to create equilibrium in exchange of goods and services.

“As an economist, I would advise them to enforce it more and more for its recognition and involve the National Treasury and the Central Bank of Kenya.

“It unifies people. Bangla-Pesa is a good concept if it [is] used as a promissory note whereas you can buy goods and services and pay later,” Mr Mwandawiro said by phone.

ARRESTED

Members of the Bangladesh Business Network, led by the national chairman Paul Mwania, said the business will continue.

“It is a business-to-business voucher system that provides a means of payment that is complementary to the Kenyan official money as the economy is dwindling.

“People don’t understand this model. They should come and learn from us,” he said.

Mr Mwania said that in 2013, six members, including inventor Will Ruddick, were arrested and charged with possession of illegal currency papers, because they were thought to be a secessionist group like the Mombasa Republican Council.

They were later released and the charges dropped.

Mr Mwania, who runs a butcher shop, trades meat for water from Emma Onyango.

He said the goods exchanged should be of the same value.

GROWING MEMBERSHIP

For example, he can get 10 jerry cans of water from Ms Onyango at Sh100 and she can get meat of the same value.

The network consists of people who run different businesses.

Ms Onyango, the grassroots coordinator, was among the six who were arrested.

“We started with around 100 members but we have grown to 2,000 and more want to join,” she said.

The group also uses Kenyan currency to buy stock.

The Bangladesh Business Network now wants to meet President Uhuru Kenyatta and Central Bank of Kenya Governor Patrick Njoroge to “enlighten” them about the currency and forge better relations.

Foreign tourists and university students are also flocking to the slum to conduct research about the currency and how locals’ lives have changed, added Ms Onyango.

Mutare — Industry minister Mike Bimha says statutory instrument (SI) 16 of 2016 which curbs imports is forcing foreign manufactures to establish factories locally.

The minister made these remarks recently when he toured the premises of South African company Willowton Group in the Nyakamete industrial site of this eastern border city.

Willowton manufactures Delite cooking oil and detergents.

“I think one of the beneficiaries of the SI 16 is the oil expressing sector,” said Bimha.

“They were officially operating below 20 percent capacity utilisation previously but now, as a result of those measures, (the company is) operating at full capacity.”

He added: “Our local manufacturers are making inroads into the export market.

“But one of the benefits arising from SI 16 of 2016 is that those companies that were exporting to Zimbabwe from their countries realize that the measure deprives them of business and strategically came to open shop locally.”

Bimha said although people still have the mindset that everything that is manufactured outside Zimbabwe is superior but was happy that Willowton has opened in Mutare.

“Now that Delite is now manufactured locally, I think the measures have encouraged them and it creates employment; encourages local competition.

“If we have local competition it has effect on price, quality, efficiency and continuous improvement,” said Bimha.

He said local companies should now look move into export markets such as COMESA and the entire African continent.

The minister also revealed that the government would extend its command agriculture programme to include soya beans so that the country stops importing crude oil.

“Instead of importing crude oil like we are doing due to shortages of raw materials, we want to pursue command agriculture but targeting soya beans.

“Once our systems are in place, we want oil expressers to support agriculture, support farmers to produce soya beans locally so that the whole value chain is produced locally,” said Bimha.

“We (also) want our producers to focus on exports which will increase much needed foreign currency.”

Meanwhile, Willlowton managing director, Bruce Henderson, said, so far, they have channelled $40 million towards the project which currently employs 130 locals.

He, however, said influx of cheap imports into the country through porous borders continues to adversely impact their operations.

By Isaac Imaka

Kampala — Consumers will have to pay more for a bottle of beer and a stick of cigarette because Members of Parliament (MPs) upped the tax on the items on Wednesday.

The MPs say they care about people’s health and the country needs more money in the vaults.

During a debate on the Excise Duty Bill, the MPs, however, ensured that even with the increased taxes, the local manufacturers of the two leisure commodities are protected by setting taxes on their products a little lower than on the imported stuff.

“If we make the difference very small, you will find that people will opt for foreign goods. If we increase, it will also cut down the intake by the local people,” Budadiri West MP, Nandala Mafabi argued as he made a case for increased tax.

With effect from the next financial year, Shs55,000 will be paid per 1,000 sticks of locally manufactured soft cup cigarettes; a Shs5,000 more from the old charges. Also, Shs75,000 will be charged per 1,000 sticks of imported cigar rates.

Locally manufactured Hinge lid cigarettes will be taxed Shs80, 000 and the imported one will be taxed Shs100, 000 per 1,000 sticks.

Mubende woman MP, Namugwanya Bugembe Benny, unsuccessfully pushed for a blanket Shs80, 000 for all locally manufactured cigarettes as a deterrent for smokers.

“Tax should be bigger on imported products but I do not agree with the insinuation that tax on local products should be lower than Shs80,000.

“We are putting tax for revenue for tax revenue but also to discourage young people from consumption but also to help the old one. Leave Shs80,000 for local and Shs90,000 for imported,” she said.

Junior minister for Finance, David Bahati, said the ministry had not differentiated between imported and locally produced cigarette “because of the tobacco control act we passed which says that we should not differentiate cigarettes because a cigarette is a cigarette.”

On beer a product whose local raw material excluding water is 75 per cent by weight per litre, a tax 30 per cent or 650 per litre or whichever is higher was passed.

The other beers produced from locally produced material have been given a 60 per cent tax.

The House, however, rejected the House committee on finance’s proposals to lower the tax on non-alcoholic beverages excluding fruit or vegetable juices from 13 per cent to 10 per cent or Shs157.

Although the committee’s argument was that the 13 per cent rate is the highest in the region, minister Bahati argued that the move will see the country lose Shs32 billion.

Mr Amos Lugoolobi, the chair of the House Committee on Budget, rejected the 10 per cent proposal arguing that government should be given chance to collect enough money.

“Out of the Shs28.8 trillion budget, our discretionary resource is about Shs12 trillion. We are struggling to find resources and this is not the time to give away Shs32 billion. I am not in support of the idea of reducing tax on beverages,” he said.

ANALYSISBy Homa Mulisa

Just last week, The Jakarta Post reported that Indonesian textile industry is facing competition from Ethiopia. According to the newspaper, despite Indonesian governments’ effort to “lure textile manufacturers away from China to the archipelago, [the nation] is facing a rising threat from East African country, Ethiopia, which is offering companies a competitive cost structure.” The claim is that China’s textile manufacturers are shifting their production overseas due to increased labour costs and air pollution, in to the availability of less expensive labour and electricity in Ethiopia, many of them are settling here.

Ethiopia’s export is currently dominated by Coffee which represent 16.5 percent of the total exports of Ethiopia, with flowers, vegetables and oily seeds follow in big fractions underscoring the fact that the economy still depends on Agriculture.

In a bid to make Ethiopia’s manufacturing sector globally competitive, it is true that the government of Ethiopia has been keen on diversifying exports with priorities focused on strategic sectors like textile and garment manufacturing in the move towards industrialization from a primarily agriculture based economy. The effort is part of the structural transformation of Ethiopia’s economy to exports of industrial outputs rather than raw agricultural products.

Ethiopia’s history in textile began in 1939 when the first garment factory was established. Data shows that in recent years, the country’s textile and apparel industry have grown at an average rate of 51 per cent per year. More than 65 international textile investment projects have been licensed for foreign investors.

The growth in the textile industry is directly linked to the government’s move to set up an industrial development strategy. As a result of this effort, 124 foreign investors have expressed interest in the Ethiopian textile sector, 71 of which are from China, as reports from the Ethiopian Investment Commission indicates.

The major driving factors that contribute to the inflow of international investors to the Nation are of course, the less expensive labour and electricity. Yet, investors are also taking advantage of the Ethiopian textile and garment industry from its high quality cotton that is grown in the country as well as duty free access to US and EU markets. It is estimated that the country has three million hectares of arable land available to grow cotton, of which only less than ten percent of this abundant resource has been utilized so far.

Moreover, the government with a commitment to the development of state-run Industrial Parks, has set up the Hawassa Industrial Park, which is exclusively dedicated to textile and garment manufacturing industries. The 250 million US dollar park is the only such facility on the continent, and it will eventually encompass 1.3 million square meters making it Africa’s largest manufacturing park.

Initiatives such as the Africa Growth and Opportunity Act (AGOA), Common Markets of East Africa (COMESA) and other bilateral trade agreements with Western countries offer free trade benefits and access to the global and regional market for Ethiopia, and in reverse is becoming a threat to some Asian countries. Moreover, an array of bilateral trade agreements concluded with Western countries, including the Netherlands, Belgium and Luxembourg are boosting textile markets abroad.

Besides, Swedish apparel giant H&M, International Labour Organization (ILO) and Swedish International Development Cooperation Agency (SIDA) have launched an industrial relations project aiming to improve the development of a socially sustainable textile and garment industry in Ethiopia. They are also dedicated to providing training and technology transfer in the sector, which all stand in favour of boosting Ethiopia’s textile industry. Accordingly, Ethiopia has risen as one of the most promising locations for more apparel manufacturing in Africa.

Henceforth, Ethiopia is showing the potential to become Africa’s textile and apparel hub with over 80 years of development, Nation’s textile and apparel industry has transformed from one of the country’s least developed sectors to today’s fully integrated industry and value chain with a significant contribution to the nation’s GDP.

According to recent reports, Ethiopian textile and apparel products are being exported to Europe, Asia, North America and African nations with a total annual export of more than 150 million US dollars per year. The Hawassa Industrial Park which is almost to kick off exporting textile and apparel to the global market is expected to generate a lucrative hard currency as big as one billion US dollars per year. This is a staggering amount of as compared to current export earning of the sector.

The industrial park is now home to some 20 international corporations from USA, Europe and Far East along local companies which have already leased factory shades.

The Industrial Park has been planned as a one-stop shop for manufacturers, according to the Industrial Parks Development Corporation. All relevant government agencies that exporters interact with will have a presence on-site, including customs, tax and immigration offices. Banking and logistics services will also be provided within the park.

Hence, in a very recent future, the Hawassa Industrial Park will indeed be known as the Ethiopian textile and garment hub, and the apparel industry will stand as a major contributor to the national economy.

By Edward Ssekika

Government has ruled out capping interest rates as one of the proposals from borrowers who needed cheaper credit.

David Bahati, the minister of state for Planning, said capping interest rates is not a solution.

“We are not going to cap interest rates because it doesn’t work. It has not worked in Kenya and it has not worked anywhere,” he said.

He added that government can only regulate the high interest rates, although he did not explain how it can be done. Bahati was speaking at the 7th Annual High-Level Policy Dialogue on the Budget under the theme, “Unlocking Uganda’s economic potential: Investing in strategic sectors of the economy” at Sheraton Kampala hotel recently.

The conference was organized by the Advocates Coalition for Development and Environment (ACODE) and the ministry of Finance, Planning and Economic Development.

The business community has been pushing government to cap interest rates to affordable levels. Interest rates in Uganda hover around 23 per cent, which is quite high compared to the return on investment that many companies make. Last year, Kenya capped interest rates in order to protect borrowers.

RECAPITALISING UDB

Instead of capping interest rates, Bahati said government plans to recapitalize the Uganda Development Bank (UDB) to provide affordable credit to borrowers.

He revealed that government is to inject Shs 300 billion into UDB in the next five years. Next financial year, which starts on July 1, UDB will be recapitalized by Shs 50 billion.

Dr Ezra Suruma, the keynote speaker and former minister of Finance, Planning and Economic Development, attributed the collapse of many businesses to high interest rates.

He said the high interest rates have something to do with the structure of the economy and have been responsible for the collapse of many businesses. He implored government to make available affordable and long-term credit to the private sector.

“Until the money is finally injected in Uganda Development Bank, I will not believe you. This is what we have been pushing for over the years,” he said.

He also advised government to improve on the capital markets so that Ugandans can safely invest in them. Suruma also proposed that “some of the money from oil should be used to start new special banks like an agricultural bank and an infrastructure bank, among others. This will stimulate growth and financial inclusion.”

The Public Finance Management Act, 2015 says that the money from oil shall be used to finance infrastructure projects. Bahati also said that although the economy has not grown as projected, it is expected to recover.

This financial year, the economy is expected to grow below 4.5 per cent instead of the projected five per cent. He attributed this to regional instability, especially in South Sudan, and the drought which has ravaged the agricultural sector. South Sudan is one of Uganda’s main export destinations.

Bahati was optimistic that the economy is expected to again grow at six per cent annually after the next financial year. Bahati said in the next financial year, government plans to reduce on domestic borrowing through the issuance of securities such as treasury bills and treasury bonds.

Currently, he said, domestic arrears stand at Shs 2.7 trillion. This has crowded out the private sector from the financial market since banks prefer to lend to government than private businesses.

Keith Muhakanizi, the secretary to the Treasury, warned against excessive borrowing.

“We must not put the country into a debt crisis.”

He added that the pressure for borrowing is too much and that if this appetite is not curtailed, it could put the country into a crisis, to a point where the country will not be able to repay the loans.

Suruma advised government to invest in sectors such as agriculture for inclusive growth. He gave the example of the coffee industry that he said has the capacity to bring in more money than oil, and can directly benefit households.

He said government should invest more money if the country is to achieve its target of producing 20 million bags of coffee annually by 2020.

OIL SECTOR

On the oil sector, the Danish ambassador to Uganda, Mogens Pedersen, warned that if stern action is not taken to fight corruption and promote inclusive growth, Ugandans should forget the anticipated benefits from the oil industry.

He warned that Uganda is headed on the path that many African countries have taken of abundant oil resources amidst poverty.

“Please, tell me one African country, where oil has been a blessing. It is always a curse for inclusive development, mainly because of corruption,” he warned.

Uganda discovered commercial quantities of oil in 2006 and efforts are underway to start oil production by 2020. Bahati assured the audience that Uganda is going to be an exception from those African states where oil has been a curse.

“You are going to see Uganda; our oil will not be a curse. All the systems have been put in place to ensure oil is a blessing for Uganda. That is why we have been cautiously slow,” he said.

Bahati said the country is looking at oil to solve its financial woes, including cutting down on borrowing.

“As government, we believe by 2020 we shall see first oil production, which is going to give us $2 billion annually [approximately Shs 9 trillion]. So, we shall be able to solve some of these challenges,” he explained.

Bahati said this financial year, government plans a massive investment in the oil sector to ensure first oil by 2020.

“We are going to invest at least Shs 1.1 trillion in the sector in order to realize the first oil target of 2020,” Bahati explained.

However, Elly Karuhanga, the chairman of Uganda Chamber of Mines and Petroleum (UCMP), asked the government to put in place a team that will make first oil a reality.

“Let us put in place a team, a dream team comprised of genuine government officials and the private sector, which will be charged with the duty to implement the oil project and en- sure first oil by 2020,” he said.

Short of that, Karuhanga doubts whether the 2020 oil target will be met.

Acting President Emmerson Mnangagwa has once again defended the chaotic land reform programme boasting that black tobacco farmers are now producing more of the golden leaf than the white commercial farmers during the colonial era.

Responding to questions soon after delivering a public lecture on command agriculture at the Midlands State University main campus in Gweru, Mnangagwa said the tobacco production figures justified government’s seizure of prime land from the white commercial farmers.

“There used to be a man called Ian Smith who used to rule this country. At the height of production of their tobacco they used to produce 200 million kilogrammes of tobacco,” Mngangagwa told the impressionable crowd.

However, he was quick to admit that the land reform programme triggered the collapse of tobacco production.

“When we took the land, taking it back to its rightful owners, tobacco production went down below 50 million kilogrammes,” he said.

Mngangagwa said production has since rebounded and they are now producing more than what white commercial farmers used to produce before independence.

“Now we are above 222 million kilogrammes of tobacco a year and this is produced by a bigger number than the whites who were doing it and the cake is now spread to ordinary families in the countryside,” Mngangagwa said.

“You can see how the revolutionary party remembers the people”.

According to figures released by the Tobacco Industry Marketing Board (TIMB), in 2014 tobacco farmers produced 216 million kg of the golden leaf with the country realising $684 million from the sales.

In 2015, the figure went down to 198.95 million kg of tobacco earning the country $584 million.

This year, industry experts have projected that tobacco production output will reach around 205 million kg.

Pretoria — President Jacob Zuma will later this morning unveil new high speed trains that will offer faster journey times and greater reliability.

The President will launch the new metro commercialised full train service as part of government’s transport modernisation programme and massive infrastructure development at the Passenger Railway Agency of South Africa (Prasa) House in Hatfield, Pretoria.

The 20-year Modernisation Programme is aimed at revitalising the rail industry through training and skills development for both Prasa employees and young people interested in railways.

The programme will also focus on upgrading the current rail infrastructure, while continuing to deliver new trains for community use. Last week, Transport Minister Joe Maswanganyi visited Prasa’s Braamfontein depot in Johannesburg to inspect the AFRO 4000 locomotives.

Minister Maswanganyi said his mandate is to deliver efficient, reliable and safe trains to the South African public.

“There is a huge demand from the South African public that they want the trains to get onto the tracks as soon as possible.

“Somehow, we’ve been failing them with the delays and shortage of trains, especially in the Western Cape, where passengers end up vandalising our trains, which we discourage in the strongest terms.

“The sooner the challenges are resolved, the sooner we see the trains transporting our people,” he said.

In 2010, Prasa embarked on a 10-year capital investment programme to upgrade the signalling systems on its various Metrorail lines. In 2012, the agency launched its plan to refurbish and replace its current rolling stock.

By Vanessa Gonye

VENDORS selling wares at the Harare International Festival of the Arts (Hifa) have expressed concern over the low business realised at this year’s event.

Vendors who spoke to The Standard Style said this year’s event was a disappointment compared to previous editions where they recorded brisk business.

“My child, it is difficult out there. Hifa is not successful for us since we are not realising anything out of it. The situation is just bad,” said one woman selling snacks at the event.

Other vendors said business was not in its usual form but it was fluctuating where at times it was booming and at times very low.

“At times we record high sales, but it depends with the day. One day it will be very good but the other, it may be difficult to sell even half of our wares,” said Andrew Sabao.

Some vendors blamed lack of business on the bad economy, saying the decline in business was a result of the bad economic situation in the country where there was a terrible cash crisis, hence the huge decline in business compared to previous editions of Hifa.

“Hifa has been boosting our businesses but this year nothing has come of it. It may be a result of the economy; we all know that there is a cash crisis in the country, so for some of us who do not accept plastic money, it is a disaster,” said Simbarashe Nekuti.

“The cash crisis is worsening the situation. We had hoped that Hifa would boost business, but it’s not the case.

During previous editions, by afternoon we would have been on our second or third lot but as you can see, this is the first lot of my wares today,” said one woman.

Hifa has been known to boost business for vendors in its previous editions but this year it has been a flop for many who usually sell their goods at the event.

By Bill Oketch

Amuru — More than 200 currency traders at Elegu-Nimule border have reportedly quit the business following sharp depreciation of the South Sudanese Pounds (SSP) against the Uganda Shilling and US dollar.

Last Thursday, the SSP was trading as low as at Shs23 down from Shs650 in 2013, whereas one US dollar was trading at 16,000 SSP.

It is estimated that the beginning of the year, more than 300 people were trading in currency at Elegu but less than 100 have ‘survived’ the risky trade.

While critics say the economy of South Sudan has now “technically collapsed” and that no measures can rescue it, traders are calling for government intervention.

“The economy is now biting, people are suffering, prices of commodities have tripled. It’s only those in authority who can survive the current economic situation. Everyone in villages is crying out for help,” said Lojur Molu, a concerned South Sudanese.

Government officials in Juba, who earn about 1,500 SSP, cannot afford to feed their families and have opted to take their children and wives to refugee camps in Uganda, according to a senior Uganda police officer.

“In 2013, if a government worker was earning an equivalent of Shs700,000 as a salary per month, he would now earn only Shs2,000 if he continues to earn at the same rate,” the source told this newspaper last week, suggesting the crisis is compounded by the shortage of dollar.

“The government in Juba spent all its US dollars in the conflict,” the police officer said.

According to Investopedia, currency fluctuations are a natural outcome of the floating exchange rate system that is the norm for most major economies.

The exchange rate of one currency versus the other is influenced by numerous fundamental and technical factors. These; include relative supply and demand of the two currencies, economic performance, outlook for inflation, interest rate differentials, capital flows, technical support and resistance levels, among others.

Mr Simon Izakare, a currency trader, said the unstable currency has affected him so much.

“You sell at a cheaper price compared to what you bought at; I bought this one at Shs23 per one pound but I may end up selling at Shs20. That’s a loss of three Shillings per one SSP,” he said.

“It reduces your working capital; it reduces income so that means you will be running business at a loss,” he added.

According to Mr Izakare, many traders have started selling clothes and general merchandise as a survival mechanism.

Traders have attributed the falling SSP to the instability in South Sudan.

War broke out in the neighbouring country in December 2013. Much as there have numerous ceasefire agreements, instability has persisted.

By Collins Mtika

Anti-Corruption Bureau has launched investigation into whether money corruptly changed hands during the rushed signing of production-sharing agreements in regard to three of Malawi’s petroleum blocks just eight days before May 20 2014 elections in the country.

The probe was requested by a range of Malawian civil society organisations and international NGO Oxfam.

The awarding of six petroleum exploration licences between 2012 and 2014, under the former presidencies of Bingu wa Mutharika and Joyce Banda, was fraught with controversy.

Less than two weeks before the 2014 poll, Banda’s government entered into production-sharing agreements with RAK GasMB 45 -a subsidiary of the United Arab Emirates’ state-owned RAK Gas, registered in the secrecy jurisdiction of the Cayman Islands – before any proven oil discoveries.

According to records of the Reserve Bank of Malawi, RAK Gas made an unexplained payment of $235 700 (89-million Malawi kwacha) to the Reserve Bank of Malawi’s account for the government’s mines department.

The company is also alleged to have paid $5-million to Banda’s Mudzi Transformation Trust, which built or renovated houses for the poor in Malawi.

The Malawi government divided Lake Malawi into six segments for oil and gas exploration. It awarded block 1 to Sac Oil of South Africa in 2012, blocks 2 and 3 to the British firm Surestream Petroleum in 2011, Blocks 4 and 5to RAK Gas in 2013 and block 6 to Ghana’s Pacific Oil.

The licenses for blocks 4 and 5 were held by RAK Gas MB45, a Cayman Island subsidiary of the state oil company of the Ras Al Khaima Emirate in the UAR.

Malawi’s graft-busting body, the ACB, confirmed that it is probing RAKGas but declined to provide more details.

“We are conducting investigations in relation to payments made by RAK Gas. The bureau will not be drawn to comment more on the issue as doing so may prejudice the investigation,” said ACB spokesperson Egrita Ndala in an emailed response.

A leaked legal opinion from the Attorney General, Kalekeni Kaphale, in 2015, suggested that some of the licences should be revoked.This was because three of the concessionaires, RAK Gas, Pacific Oil and Hamra oil, which later took over Surestream Petroleum’s concession, were connected by a thin “corporate veil” apparently intended to circumvent the rule that one company could not hold two contiguous blocks.

In an analysis of the contracts published in February this year, entitled “Malawi’s Troubled Oil Sector: Licences, Contracts and their Implications” Oxfam objected that “if oil exploration is successful, the agreements could be in place for 30 years covering exploration, extraction, and closure. These agreements give Malawi a raw deal and an incoherent fiscal package.”

Oxfam and its local civil society partners then asked President Peter Mutharika not to endorse oil exploration in Lake Malawi, saying there were many grey areas that needed to be cleared up.

“Given the purported irregularities around the initial signing of the contracts, ongoing ACB investigation , the absence of transparency in the renegotiations being led by the Minister of Agriculture, Irrigation and Water Development, the lack of a clear petroleum policy [and] an updated Petroleum Act, a completed model contract and comprehensive financial modelling, we are calling on the President not to approve the exploration,” they said.

However, Mutharika has remained defiant on the issue. Malawi’s Petroleum (Exploration and Production) Act, passed in (1983), vests all oversight powers in respect of petroleum products in Malawi in the hands of the President, although it also empowers the responsible minister to conclude agreements.

In a subsequent comment to Mining in Malawi publication, Mutharika indicated that exploration will go ahead.

“Using the available technology, we will get results similar to those obtained through offshore drilling,” he told the journal. “Note that the companies will benefit from non-expenditure of drilling platforms which usually comprise old ocean ships which are designed for oceans and not narrow and rougher lakes like ours. Companies will benefit from non-expenditure on appropriate drilling platforms.”