Govt shoots own foot

The year is October 2016. The Malawi Government launched the second Malawi Investment Projects Compendium after a similar initiative two years earlier.

Government uses the compendiums to entice entrepreneurs to invest in selected projects in sectors of the economy, including energy, mining, agriculture, agri-business, infrastructure, water, manufacturing and tourism.

Among the projects government approved is the now controversial integrated shopping town in Area 1 along Kamuzu Procession Road in Lilongwe’s Old Town where what remains of the Malawi Police Service ‘C’ Company is situated.

Since the location also happens to house the police, government decided that “the party(s) that will take up this prospect will re-locate the police to a new designated area,” and then begin to develop the new ‘town’.

One investor, World Wide Construction Company, showed interest in the proposal and, following consultations among key ministries of Lands, Homeland Security and Trade, was given a go-ahead by government.

Now, in November 2020, the Government of Malawi under the Tonse Alliance administration through Minister of Homeland Security Richard Chimwendo Banda says it will not allow that land to be offered for development through what he called “barter”.

In an interview, the minister said he did not care whether such a reversal of a government undertaking would have consequences or not.

Said Chimwendo Banda: “Government does not barter land whatsoever and this government will not barter land. This is not happening, whether there are consequences or not. Let the law take its course.”

He said government cannot allow such a huge piece of land, especially public land, to be acquired by one individual.

But some of the consequences that Chimwendo Banda does not care about include a potential fall in investor confidence on the back of uncertainties, which could sharply shrink both foreign direct and domestic investment.

A drop in investment could sharply damage a country that has already lost balance of payment support from development partners largely due to weak public finance management and poor economic governance in general.

Government wanted the land in question to host “a modern multi-purpose one stop town that aims at bringing products and services at one place to maximise consumer satisfaction”.

“The shopping town will not be just another mega shopping mall, but a deliberately designed mini-town to provide wide shopping options, modern recreational facilities, educative materials, lodging with other numerous support services,” says the Banda alongside Minister of Lands Kezzie Msukwa and Deputy Minister of Lands Abida Mia visited the ‘bartered’ land where they indicated that government was going to cancel the agreement and revisit the arrangement.

Despite the said reversal of the arrangement, the compendium document shows that the Malawi Government initiated the barter arrangement and invited investors to submit proposals in 2016.

In a separate telephone interview on the implications of the reversal, Laudon Luka, an expert on land matters and lecturer at Mzuzu University, said while government might have explored the legality of the matter before proceeding with the transaction, it put itself in a difficult position.

He said the decision by government to barter the land in exchange of services was ill-timed, adding that it was setting itself in a position of losing than a win-win situation.

In a separate telephone interview yesterday, former Cabinet minister Joseph Mwanamvekha, who headed Trade and Industry at the time the compendium was developed, said the reversal will send a wrong signal to would-be investors.

The contract agreement states that the contractor was to pay the duly assessed premium for the current location, Plot Number 2/017 and 2/683, all land in total comprising 20.174 hectares after an independent revaluation.