The National Advocacy Platform (NAP) and several economic analysts have voiced concerns over the recently amended Liquid Fuels and Gas (Production and Supply) Act.
The new law, which Parliament passed on Tuesday, aims to operationalise President Lazarus Chakwera’s directive to transition from an open tender system to government-to-government procurement for the procurement of liquid fuels and gas.
However, critics argue that the amendments could undermine Malawi’s Public Finance Management (PFM) framework.
The revised law grants the Minister of Energy authority to appoint agents or state entities to import fuel, bypassing the oversight requirements established under the Public Procurement and Disposal of Assets (PPDA) Act of 2017.
This shift, according to the government, will streamline procurement by eliminating intermediaries, thereby reducing fuel importation costs.
Despite these assurances, Scotland-based economic analyst Velli Nyirongo remains sceptical. He acknowledged the potential for cost reductions but cautioned that the reform alone would not solve Malawi’s chronic fuel shortages.
“Reducing intermediaries may lower transaction costs and improve efficiency, but persistent shortages will continue without robust infrastructure, adequate storage, and an efficient distribution system. These shortages often result from multiple factors,” he said.
Echoing these concerns, NAP chairperson Benedicto Kondowe cautioned that the amendment threatens fiscal accountability.
“By allowing ministerial discretion and exemptions, the law fosters opaque decision-making, increases the risk of corruption, and undermines public fund management,” he said. “It could also distort competition and inflate costs, thereby straining public finances further.”
Economic analysts Bond Mtembezeka and Derrick Thomo shared similar reservations.
Mtembezeka, also Business Partners International country director, described the new law as a blow to transparency and accountability—core tenets of the PFM framework.
“Exempting such significant processes from established procurement rules could erode trust in the system and pave the way for financial mismanagement,” he said.
Thomo, an economics lecturer at the Catholic University, of Malawi underscored the risks of inefficiency and market distortions.
“The creation of monopolies is a real concern. Such market dynamics can lead to inflated costs and reduced value for money,” he observed.
These sentiments are shared by Bright Msaka, spokesperson for the Democratic Progressive Party (DPP) on legal issues.
In his response to the Bill in Parliament, Msaka a professional lawyer and former Energy Minister, warned that the amendment could leave Malawi’s procurement system vulnerable to financial abuse, compromising the principles of fair and competitive practices enshrined in the PPDA Act.
The PPDA Act, established in 2003, was designed to ensure the application of transparent, non-discriminatory, and value-for-money procurement standards. Critics argue that the recent amendments undermine these principles, posing significant risks to Malawi’s fiscal integrity.
As debate over the law intensifies, the government faces growing pressure to ensure that efficiency gains do not come at the expense of transparency and accountability.
