Malawi: Is the $6.7bn grant with Bridgin Foundation nothing more than a scam?

By Deogracious Benjamin Kalima
Posted on Tuesday, 13 December 2022 12:53

Malawi’s President Lazarus Chakwera attends a press conference in Davos on May 25, 2022. (Photo by Fabrice COFFRINI / AFP)

When Malawi’s President Lazarous Chakwera presided over the signing ceremony of a $6.8bn grant with Bridgin Foundation to finance various developmental projects, he sang praises of the foundation’s investments. But not everyone is excited with this news. Many question the integrity of Bridgin Foundation, where previous endeavours in other countries remain vague at best.

On 28 November, President Chakwera signed a grant with Bridgin Foundation that is meant to transform and help the country achieve its developmental blueprint, Vision 2063.

The agreement will allow Bridgin Foundation to invest in various infrastructural projects over a four-year period.

The projects earmarked for implementation are in the areas of health, education and the energy sector.

Chakwera said what Bridgin Foundation had done was not just an act of kindness, but also an act of trust in his government, which he says is committed to making the lives of ordinary Malawians better.

“This year, heaven has smiled on us by allowing Christmas to come early for our country.

“Never in the history of this nation has there been a developmental programme as momentous as the one we are embarking on today,” he said.

Terms of the agreement

Chakwera said the investment in the country’s projects will not create any repayment obligation for the government.

Instead, the revenue that Bridgin Foundation will generate will be invested back into other new projects that will contribute to the country’s achievement of the United Nation’s Sustainable Development Goals (SDGs).

He issued a warning that anyone within the government who may put spanners in the process through corruption or sabotage would be swiftly dealt with.

“It is my expectation that all relevant Ministries will have to push all cylinders on the implementation of the projects. If anyone is found to look for ways of personally benefitting through corrupt means, I will deal with them.”

‘Game changer’

Finance minister, Sosten Gwengwe who signed the agreement on behalf of the Malawi Government, described the agreement as a game changer, saying it brings an unprecedented level of development that will impact the lives of many Malawians.

  • He cited the impending investments in the area of tertiary education where the foundation has committed to invest in Malawi’s universities of Mbelwa,
  • Malawi University of Science and Technology,
  • Mzuzu University,
  • Lilongwe University of Agriculture and Natural Resources (LUANAR), among others, that he believes will assist the country to achieve its development blueprint, Malawi 2063.

“The universities are where knowledge and expertise are created and we envision an acceleration of the country achieving the Malawi 2063 much quicker than anticipated,” said Gwengwe.

According to Gwengwe, the agreement has seven priority areas to be undertaken in various universities, which include:

  • The establishment of a chemical fertiliser technology at LUANAR, at $750m;
  • A power generation plant with the capacity to produce 1000MW of electricity

Learn from past mistakes?

Renowned Malawian social media influencer, Joshua Chisa Mbele, says the desperation on the part of the government to fulfil the electoral promises is forcing them to jump at every opportunity that comes its way without critically looking at the offers that may cost the taxpayers more money in the long-term.

Mbele wonders why a financial institution of Bridgin Foundation’s alleged calibre does not have reference sites to direct people to its previous projects.

“After an online search, all I can find are pictures of signing ceremonies with leaders of struggling economies but I have not been able to find projects which have been successfully delivered.

“And it is even more problematic to understand where they actually get funding for all these projects they claim to be implementing,” says Mbele.

With a grant from the foundation that is nearly half the size of Malawi’s economy as measured by its current GDP valued at $12bn, many Malawians are increasingly suspicious of its capacity to follow through on its promises.

“The grant they are promising to give is way above Malawi’s annual total budget which is pegged at $2bn which I have serious reservations going by the colossal sum involved,” he tells The Africa Report.

He asked the foundation to invite a Malawian delegation to visit other project sites outside of Malawi where they are investing, to assuage those fears.

Background check

Mbele adds that it is worrisome how the government of Malawi is engaging a firm on multibillion-dollar projects without having done its homework, which wouldn’t be the first time.

Just a few weeks after the Bridgin agreement, it was discovered that Malawi lost $1m to a British business that had promised to deliver chemical fertiliser for subsistence farmers.

It demanded an upfront payment of $1m before disappearing without delivering a single bag of fertiliser.

“We seem not to learn from our mistakes. We have just recently lost taxpayers’ money through carelessness on the part of people entrusted to do work for us citizens to some middlemen in the United Kingdom, now here we are signing an agreement with a firm whose credentials are questionable,” he says.

Sceptics unite

Betchani Tchereni, an economist and university lecturer at the Malawi University of Business and Applied Sciences (Mubas), says given the colossal sum involved, both sceptics and optimists are justified in their opinions.

“The $6.8bn is a big number and people are justified to be sceptical. The ‘it is too good to be true’ principal [is] at work.

“However, it won’t take long to prove [otherwise]. Assuming it is true and not bogus, $6.8bn is a number to salivate [over]. However, if it is bogus, then it is a shame,” he tells The Africa Report.

The grant they are promising to give is way above Malawi’s annual total budget which is pegged at $2bn which I have serious reservations going by the colossal sum involved.

Former Reserve Bank of Malawi governor Dalitso Kabambe has also cast doubt on the deal.

Writing on his Facebook page, he said the foundation could be one of those bogus institutions that if not clearly assessed, could end up giving Malawian taxpayers a raw deal.

“There are always tempting offers which prove there are mere promises. The rule of thumb always remains that if it sounds too good to be true, then it is most likely to be not true. A little research on some of the offers reveals such offers as scams,” he wrote.

The Budget and Finance Committee of Parliament has also joined the bandwagon of sceptics.

The committee’s chairperson, Gladys Ganda, says her committee is eager to learn about the conditions, if any, that are attached to the grant.

“This was not presented in Parliament by the Minister of Finance as it is not mandatory to do so. However, we are also interested to learn more about the deal especially after many Malawians have voiced out their views on the grant,” she said.

Response

Bridgin Foundation has tried to allay fears and accusations by stating it has followed through on this type of deal before, citing its cooperation with the Ugandan and Nepalese governments respectively where it currently has various projects.

The foundation’s programme director, Christopher Prieels said the foundation is trying to bridge the gap in finance between Africa and the West by encouraging innovation, especially in universities hence the grant to Malawi.

He added that he was surprised by Malawians who are doubtful.

“We will work with different institutions both public and private, to make it happen. We are just surprised that a lot of people are sceptical about the grant.

“Is Malawi not worth $7bn or more? That amount is not much in terms of the development of a country.”

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