‘Government must release the mining agreement it signed with Lotus Resources for public scrutiny to avoid a repeat of harmful discretionary tax incentives experienced through Paladin Africa’—Rev. Maulidi

Rev. Baxton Maulidi

* It surprising that the current government administration did not heed the recommendations that ActionAid Malawi gave

* In order not to repeat the combination of what ActionAid described as harmful tax incentives — which saw Malawi losing out in revenue

By Duncan Mlanjira

Mindful that Government already signed the Mining Development Agreement (MDA) with Australian company, Lotus Resources Limited in July 2024, All Africa Conference of Churches (AACC) Economic Justice & Accountability champion in Malawi, Rev. Baxton Maulidi still contends that the contents of the agreement should still be released for public scrutiny to avoid a repeat of harmful discretionary tax incentives experienced through former investor Paladin Africa.

Rev. Maulidi, who is Church of Central Africa Presbyterian (CCAP) Blantyre Synod’s Deputy General Secretary, made the call after observing that the agreement made with Paladin Africa in 2009 had seriously flaws, which which were red flagged by ActionAid Malawi in 2015; https://www.maraviexpress.com/lotus-resources-strong-tax-breaks-on-kayelekera-mine-deal-defy-advice-against-such-incentives-made-by-actionaid-malawi-in-2015-on-former-investor-paladin-africa/

“It surprising that the current government administration did not heed the recommendations that ActionAid Malawi gave in order not to repeat the combination of what ActionAid described as harmful tax incentives — which saw Malawi losing out in revenue,” he said.

“ActionAid was very explicit in its recommendations that going forward, mining agreements, or for any other businesses, any tax incentives should be subject to Parliamentary and public scrutiny before being signed, and that they are made publicly available immediately upon signature.

“Why was the agreement with Lotus Resources signed in secret? And having been already sealed, why is it not made public?” asks Rev. Maulidi, having taken note that ActionAid Malawi’s report revealed that Paladin Africa manipulated the tax break incentives which saw them lower some tax rates in Malawi and exempt them from paying some taxes altogether; https://www.maraviexpress.com/lotus-resources-strong-tax-breaks-on-kayelekera-mine-deal-defy-advice-against-such-incentives-made-by-actionaid-malawi-in-2015-on-former-investor-paladin-africa/

Thus Rev. Maulidi’s emphasis that the current government administration, along with experts in the field of foreign company investment, “must tread carefully in dealing with Lotus Resources.

“Also being an Australian company, it might have the same same intent that Paladin Africa did between 2009 till it was sold off,” said the Economic Justice & Accountability champion.

He further contends that it even becomes “obviously suspicious” that after Paladin sold 65% of its shareholding interest in Kayelekera and 20% to Lily Resources, Lotus Resources then acquired Lily Resources’ 20% stake, leaving the Malawi Government still holding 15% of the Kayelekera project.

“That’s why we are asking that the contents of the agreement should still be made public just like ActionAid Malawi suggested to be done for any other mining investment so that it should be scrutinised by experts, Parliament, CSOs and any other interested stakeholders,” said Rev Maulidi.

The deal made last year just involved Minister of Finance, Minister of Mining and Attorney General Thabo Chakaka Nyirenda and the only stakeholders involved after signing the agreement were traditional leaders in Karonga, led by Paramount Chief Kyungu, who signed a Communinty Development Agreement with Lotus Resources, which did not represent national interest.