Nocma act is mismanagement of public funds
The last time I checked, the National Oil Company of Malawi (Nocma) was established in 2010 under the Companies Act of 1984 with a mandate to manage a strategic fuel reserve facility in the country.
The formation of Nocma was in accordance with the Malawi Government’s approved Strategic Fuel Reserve Management Plan. The State-owned agency was also to provide, at a fee, hospitality to new entrants as one way of promoting investment in the sector.
Nowhere in the statutes establishing Nocma is it mentioned that it will also be a lending institution, giving money to other agencies of government. For all I know, lending is the preserve of financial institutions.
It, therefore, came as a surprise this week to hear Nocma deputy chief executive officer Helen Buluma reporting to the Parliamentary Committee on Natural Resources and Climate Change that the Malawi Cargo Centre Limited (MCCL)—another Malawi Government agency that facilitates imports and exports at the port of Dar es Salaam in Tanzania—is “defaulting” on an estimated K1 billion loan extended by Nocma.
From the narration, MCCL was expected to start repaying the “loan” back in 2018 after rehabilitating its fuel facilities at the port of Dar es Salaam. We learn that government “instructed” Nocma to meet the cost of rehabilitation of the fuel tanks and pipeline at the port to improve and ensure security of fuel supply in Malawi.
The transaction is reminiscent of the K2.9 billion loan the Malawi Energy Regulatory Authority (Mera) extended to State produce trader the Agricultural Development and Marketing Corporation (Admarc) in 2016. It emerged, through investigative journalism, that the funds were drawn from the Price Stabilisation Fund (PSF) meant to cushion Malawians against rising fuel prices by covering importers’ losses.
Minister of Finance at the time, Goodall Gondwe, described the transaction as illegal and that his ministry never authorised the same. The illegal withdrawal of public funds from the PSF led to the rolling of heads at Mera, but Admarc is yet to pay back.
My point is that Nocma is not a victim in the K1 billion deal. It is part of a scheme that mismanaged public funds by extending a loan, something outside its mandate.
What does not make sense in the whole equation is that MCCL is a business and charges for its services. Why did it not raise funds to refurbish its facilities for which it charges users?
Through its vice-chairperson George Million, the Parliamentary Committee on Natural Resources and Climate Change asked Malawi Government to take over the running of MCCL. I do not think that is the best solution. We all know that governments are bad entrepreneurs. Perhaps what needs to be done is to employ a public private partnership arrangement in the set up.
Back to the K1 billion loan extended by Nocma. The Parliamentary Committee on Natural Resources and Climate Change should help the public recover its money by engaging relevant agencies.
In my view, Nocma is not a victim. It is an accomplice which should also be investigated. The public has the right to know who authorised the “loan” to MCCL, the terms and what has suffered in terms of service delivery due to the absence of the K1 billion in public funds.
The conduct of Nocma and Mera to extend loans when they are not financial institutions is tantamount to abuse. Sanity needs to be restored.
Public officers should be mindful that they hold their positions on trust of the people of Malawi and are accountable to them. It is in this regard that I feel it is not asking for too much to call for a thorough probe into the whole deal.
