Govt censured over contract breaches

Economic and accountability pundits have censured successive administrations over continued contract breaches with affected companies getting compensated at the expense of poor Malawians.

In the latest case, the High Court of Malawi has ordered the government to pay Mulli Brothers Limited, Web Commercials Limited, Rock Ba Rock and FF Trading compensation for loss of business or profit or revenue after their contracts under Affordable Inputs Programme (AIP), now Farm Inputs Subsidy Programme, were unlawfully withheld in the 2020/21 farming season.

High Court Judge Simeon Mdeza ruled that the bidders were entitled to damages for lost business, profits or revenue, directing the Registrar to assess damages if parties disagreed, and awarded costs following the successful appeal.

Bamusi: This is a corrupt practice. | Nation

In an interview yesterday, public expenditure tracking expert Mabvuto Bamusi said these are serious compensation scandals, and are a form of grand corruption where cartels within and outside government connive to siphon public funds in the name of compensations.

“This is a corrupt practice which demonstrates impunity and disregard of public finance management laws because perpetrators of the malpractices know that their actions will go unpunished,” he said.

Centre for Social Transparency and Accountability executive director Willy Kambwandira said the ruling exposes taxpayers to another enormous and potentially open-ended compensation bill for fertiliser that was never supplied.

Private practice lawyer Benedicto Kondowe said repeated breaches undermine investor and supplier confidence, increase the cost of doing business with government and expose the State to expensive litigation.

On his part, economist Dalitso Kubalasa also noted in an interview that the Malawi government has developed a concerning tendency to break promises and disregard contractual obligations.

The judgement comes after our sister newspaper, the Weekend Nation reported in July that successive Malawi Government administrations’ politically-driven decisions have exposed taxpayers to over K3.2 trillion in court-ordered compensations

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