Malawi Government has bowed down to pressure from contractors rehabilitating the 302 kilometres section of the M1 from Lilongwe to Rumphi to be paid in euro, the project’s contracted currency.
However, the government said interest on the outstanding payments will still be paid in Malawi kwacha.
In a written response yesterday, Roads Authority (RA) chief executive officer Engineer Ammiel Champiti confirmed that government has resolved the foreign exchange control regulatory and contractual issues that had affected the contract.
He said: “Processes to effect the outstanding payments have since commenced. They are being paid and will continue to be paid in euro for all payments except interest on delayed payments. Interest on delayed payments will be paid in Malawi kwacha.
“The matter relating to the mode and currency of payment has been resolved following government’s intervention, and the agreed contractual payment framework is now being implemented.”
Initially, the government had wanted to pay the contractors, whose certificates were approved within the past six months, in the local currency equivalents, but the companies insisted on the
funds being remitted in euros or else they would halt work.
The outstanding payments include €1.3 million (about K2.7 billion) for Lot 2, €1.7 million (about K3.6 billion) for Lot 3 and €2.8 million (about K5.9 billion) for Lot 4, all of which exclude interest rates for delayed payment.
Champiti said full-scale works are expected to regain momentum as the country moves into the dry season.
“It is also important to note that, notwithstanding the challenges that led to the temporary slowdown, most road projects experience reduced activity during the rainy season due to ground conditions that are not conducive for key construction operations,” he said.
Mini ster of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha yesterday also said the differences were
resolved.
“That is off budget support, and yes the matter has been resolved because it does not affect the budget,” he said.
The contractors are China Jiangxi for Lot 1, Mota-Engil Malawi for Lot 2, Unik Construction Engineering Limited for Lot 3 and China Henan International Corporation Group Company Limited for Lot 4.
The main funders of the project European Investment Bank (EIB), a financing arm of the European Union (EU), told The Nation on Monday that they expected Lilongwe to do the needful on the matter as next funding is dependent on the success of the first phase.
The EIB is currently in discussion with the Government of Malawi on the signature of an additional €38 million funding and €20.4 million EU grant for the project, which is naturally also dependent on the successful implementation of the first phase.
Meanwhile, Construction Sector Transparency Initiative Malawi chairperson Engineer Samuel Biton has since urged government to always respect contractual terms, prioritise settlement of certified works, and ensure clear alignment between contractual currency provisions and actual payment mechanisms.
RA records, as shared by spokesperson Alice Chinthochi show that as at Tuesday, February 17 2026, at least 167km had been constructed out of 302km.
There are 74km out of 102km on Lot 1 from Kamuzu International Airport (KIA) junction to Kasungu Boma, 34km out of 85.5km for Lot 2 from Kasungu Boma to Jenda in Mzimba, another 34km out of 46.5km for Lot 3 from Jenda to Mzimba Boma junction and 25km out of 66.5km for Lot 4 from Kacheche to Chiweta.
