By Staff Reporter
Lilongwe, JUNE 19 — The Malawi government has awarded a K156 billion fertilizer contract to Namibian oil company Nendongo Commercial Group (NCG).
The contract, which was signed on June 15, 2023, calls for NCG to supply 200,000 metric tonnes (MT) of fertilizer to the Malawi government. The fertilizer is to be delivered to Lilongwe within three months from the date of signing.
The contract price of $150 million (about K156 billion) is significantly higher than the market price of fertilizer. According to the Malawi Agricultural Commodity Exchange, the current market price for NPK fertilizer is $650 per tonne, while the price of Urea is $550 per tonne.
The contract has raised concerns from some quarters, who are questioning why the government would award such a large contract to a company that does not have a track record in the fertilizer industry.
NCG is a relatively new company, having been established in 2018. The company’s website states that it is involved in the oil and fish industry, and does not mention anything to do with fertilizer or agricultural products.
The contract has also been criticized for being awarded without the knowledge of Parliament. The Parliamentary Committee on Agriculture has said it will summon officials from the Smallholder Farmers Fertiliser Revolving Fund of Malawi (SFFRFM), which is responsible for procuring fertilizer for the government, to explain how the contract was awarded.
The Anti-Corruption Bureau (ACB) has also said it is investigating the contract after receiving complaints.
This is the second time in recent weeks that the Malawi government has been accused of awarding a suspicious fertilizer contract. Last week, it was revealed that the government had signed a K500 billion contract with a company that turned out to be a front for Malawian businessmen.
The government has been under pressure to improve its procurement processes in recent years. In 2019, the government was forced to pay back K1.2 billion to a company that had been awarded a contract to supply maize that was never delivered.
The latest fertilizer contract is likely to add to the pressure on the government to improve its procurement processes.
– Namibia Daily News